What’s happening
The European Parliament has voted in favor of adopting the Digital Services Act and Digital Markets Act.
Why it matters
These two pieces of legislation will overhaul how Big Tech and the internet are regulated in Europe, introducing better protections for internet users and potentially leading to big fines for tech companies failing to comply.
What’s next
Both pieces of legislation need to be adopted by the Council of the European Union before they come into effect later this year.
The EU came one step closer to implementing its overhauled plan to regulate Big Tech and the internet on Tuesday when the European Parliament agreed to adopt the new Digital Services Package.
The package consists of two pieces of legislation: the Digital Services Act, which protects the rights of internet users, and the Digital Markets Act, which is designed to create fair and open competition in the digital realm. Together the pair of laws propose a set of new rules for all digital services, including social media and online market places.
Members of the European Parliament voted overwhelmingly in favor of adopting both laws in a vote on Tuesday morning in Strasbourg, France. The DSA passed with 539 votes in favor (with 54 against and 30 abstentions), and the DMA passed with 589 votes in favor (with 11 against and 31 abstentions). The next step in the lengthy EU legislative process is for both laws to be adopted by the Council of the European Union, after which they are expected to come into effect in the fall.
“10 years ago, a page was turned on ‘too big to fail’ banks,” said Commissioner for the Internal Market Thierry Breton in a statement. “Now — with DSA and DMA — we’re turning the page on ‘too big to care’ platforms.”
The two laws mark the EU’s biggest effort yet to hold Big Tech accountable, with eye-watering penalties for those that fail to comply. Large tech companies could face fines of up to 10% of their global revenue for DMA breaches and 6% for DSA breaches — potentially reaching billions of dollars.
As countries around the world struggle with how best to regulate the internet, Europe has shown consistent leadership in this area by putting laws in place to govern Big Tech and to secure internet users’ rights in the online world. Not all of these efforts are unanimously considered to be successful by tech companies and critics, but they are enormously influential when it comes to shaping tech companies’ policies and nudging other countries, including the US, into cooking up laws of their own.
There are a number of ways in which the new laws could influence the actions of tech companies over the next few years. The Digital Markets Act is the EU’s attempt to even the playing field among tech companies, regardless of size, and could force companies to make messaging apps interoperable. The DSA would prohibit certain kinds of ads on platforms, preventing targeted ads aimed at children or tailored to people’s ethnicity or sexual orientation.
“We are finally building a single digital market, the most important one in the ‘free world’,” said Breton on Tuesday. “The same predictable rules will apply, everywhere in the EU, for our 450 million citizens, bringing everyone a safer and fairer digital space.”
