New digital challenges have emerged for the European Union in recent years such as the spread of counterfeit goods, hate speech, cyber threats, disinformation, limited competition and the foreclosure of digital markets.1
The European Commission tabled a digital services package in December 2020. Legislative proposals for a Digital Services Act (DSA) and a Digital Markets Act (DMA) were presented by the Commission which have since worked their way through the E.U.’s legislative procedures and were adopted in 2022.2
In 2021, following accounts given at a hearing in the European Parliament by a big tech whistleblower, MEPs were troubled to hear revelations about practices at one very large online platform and how they impact users and their fundamental rights. MEPs expressed their concerns about reports about the exploitation of children and teenagers’ mental health and micro-targeting, including for political purposes.3
88% of businesses and business users had encountered unfair trading conditions on large platforms.4
Survey data in recent years suggests that many European citizens have had concerns about internet safety. A large majority agree that freedom of expression needs to be protected online and that arrangements need to be put in place to limit the spread of illegal content online.5
The Digital Services Act entered into force in November 2022 and will be directly applicable across the EU by 17 February 2024.6
The closely related Digital Markets Act entered into force on the 1st of November 2022 and its rules started to apply from the 2nd of May this year.7
All online intermediaries offering their services in the Single Market will have to comply with the new rules. 8 However, very large platforms and very large online search engines have had to comply with the obligations since August. 9
The new rules will give the EU Commission more oversight over big tech to help tackle disinformation, illegal content and goods, and manipulation within the Single Market.10
The Digital Markets Act is expected to have an impact on economic growth ranging between €12 billion and €23 billion.11
The EU says it aims to create a safer digital space in which the fundamental rights of all users of digital services are protected. 12
The Digital Services Act and Digital Markets Act will create a level playing field that will allow innovative digital businesses to grow within the single market and compete globally.13
The new EU legislation offers a common set of rules across the EU Single Market for digital services.14
Previous EU regulations in other industries have had global effects, these new EU rules could also significantly influence the workings of the global internet.
The New Digital Challenges for Europe
The New Digital Rules
The Potential Global Impact
Unscramble-O-Meter | With the new EU regulations, how concerned should Europeans now be about the power of big tech?
The visible hand of politics matters in more areas of the economy these days. Last week I wrote about how industrial policy has made a comeback on both sides of the Atlantic, particularly when it comes to the green economy. In Europe, the European Union has also been busy over the last few years developing the new rules of the game for the European digital economy. From this month the EU is getting tough on Big Tech.
Keep reading with a 7-day free trial
Subscribe to Kevin Unscrambles to keep reading this post and get 7 days of free access to the full post archives.