Facebook, TikTok face unprecedented legal scrutiny in Europe

Across the European Union (EU), a host of major internet companies including Facebook, Meta's Instagram, Chinese-owned TikTok and several Google services are looking to adapt to new rules from authorities, such as preventing the spread of harmful content, banning or restricting some user targeting activities and sharing internal data with regulators and researchers.

The EU is widely seen as a global leader in broad technology regulation, with legislation such as the Digital Markets Act and the AI Act in place. The bloc’s success in implementing its new regulations will influence the development of similar legislation globally.

Companies found to be in breach of the DSA face fines of up to 6% of their global turnover and could be banned from operating in Europe altogether for repeat offenders.

Currently, the DSA rules only apply to the 19 largest online platforms, defined as having 45 million or more users in the EU. However, from mid-February 2024, the DSA will apply to all other platforms, regardless of size.

Stress test

Over the past few months, the European Commission said it has asked 19 leading tech platforms to undergo “stress tests” under the DSA. The tests are designed to assess whether the platforms can “detect, address and mitigate systemic risks, such as disinformation,” the Commission said. At least five platforms have participated in the tests, including Facebook, Instagram, Twitter, TikTok and Snapchat.

However, even before the DSA officially took effect, Facebook was still approving online ads containing harmful content - according to research recently released by the non-profit organization Eko.

Specifically, the organization “tested” and submitted 13 ads containing harmful content for approval, including one ad inciting violence against immigrants and another ad calling for the assassination of a member of the European Parliament (MEP).

Eko said Facebook approved eight of the 13 ads submitted within 24 hours. The researchers removed the ads before they were published, so no Facebook users saw them.

The DSA's sweeping, restrictive regulations impact the core businesses of many Big Techs.

Responding to Eko's research, Meta said: "The report is based on a very small sample of ads and is not representative of the number of ads we review every day worldwide ."

Legal battle

“We expect platforms to fight tooth and nail to protect their operations, especially when new compliance regulations infringe on companies’ core business models,” said Kingsley Hayes, head of data and privacy litigation at law firm Keller Postman.

While no business has publicly “opposed” the DSA, Amazon and Zalando have so far objected to its inclusion.

In July 2023, Amazon filed a legal complaint with the Luxembourg-based General Court, the second-highest court in Europe, arguing that larger rivals in EU countries had not yet been designated.

Additionally, the online retail giant is also rolling out a number of new features as part of its DSA compliance program, such as setting up a communication channel for users to report inaccurate product information.

Fashion retailer Zalando also filed a complaint, arguing that it only has 31 million monthly active users, below the EU's threshold of 45 million, so it is inappropriate to include the platform on the DSA's list of 19 technology entities.

(According to Reuters)

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