EU and the Digital Services Act

January 29, 2022

European Parliament overwhelmingly approved the first draft of the Digital Services Act to regulate big tech data collection and advertising

On January 20, 2022, the European Union took a major, first step in passing laws to transform how technology companies do business in the EU. There are still several steps before the laws become final, but in the initial vote the 27-nation members overwhelmingly approved tighter controls.  

The proposed Digital Services Act would, among other things, require major technology companies to aggressively police content and further limit advertising. For example, the law would require companies to remove content considered illegal in the country where it is viewed. This would include such things as Holocaust denials in Germany and racist postings in France. It would also allow Europeans to more easily opt out of targeted advertising and prohibit advertising targeted at children. 

To quote the colorful warning statement of Christel Schaldemose, the center-left lawmaker from Denmark who led negotiations on the bill: 

With the [Digital Services Act] we are going to take a stand against the Wild West the digital world has turned into, set the rules in the interests of consumers and users, not just of Big Tech companies and finally make the things that are illegal offline illegal online too. 

This is a warning shot across the bow for high technology companies everywhere.

The debate by the European Parliament and Council of the European Union on the final language is expected to take months. The law may serve as a model for the U.S. where Congress is also considering legislation. Greater control over digital practices worldwide seems inevitable. Tech companies would be wise to modify and amplify their efforts accordingly. That will make tweaking a little easier down the road when legislation is final. It is not to hard to read the writing on the wall.