Tech giants race to alter online operations as EU digital rules bite

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The world’s largest online companies have been racing to implement new measures, from restricting personalised advertising to altering policies on hate speech, in preparation for onerous new EU rules that come into force on Friday.

Nineteen platforms, including Instagram, Google and TikTok, face special obligations under the Digital Services Act, landmark legislation that is designed to police content online that was approved in April last year.

The sweeping rules include banning the targeting of ads to users based on religion, gender or sexual preferences; mechanisms to force platforms to disclose what steps they are taking to tackle misinformation or propaganda; and new protections for minors.

The first test comes on August 25, when companies will start having to submit risk assessments of how they plan to meet the new requirements.

The deadline has led to a scramble to alter business practices across online groups. Elon Musk’s X Corp, formerly Twitter, responded by introducing a hate speech policy that prohibits users from targeting anyone with “hateful imagery”, such as the Nazi swastika.

Social media companies including Facebook-owner Meta, Snap and TikTok have moved to give millions of users the option to turn off some personalised content which had been considered key to the platforms’ success in hooking users.

These companies, as well as Google, have also restricted targeted ads for under 18s, while providing users with more information on why they have been targeted by certain marketing.

Sir Nick Clegg, president of global affairs at Facebook parent Meta, said it had “assembled one of the largest cross-functional teams in our history, with over 1,000 people currently working on the DSA”.

“It is a big deal not just for European tech companies but for all tech companies that operate in the EU,” he wrote in a blog post published this week.

TikTok said it had also assigned more than 1,000 staff to work on DSA compliance, in a sign of the huge resources dedicated by companies to meeting the rules.

“It’s an inflection point,” says Alec Burnside, a Brussels-based partner at law firm Dechert. “We now have a new digital code for the internet with the EU moving first and likely becoming the template for many countries outside the bloc.”

There are still efforts to push back against the rules, however. Amazon and German internet retailer Zalando have launched legal challenges, arguing that they should not be considered “very large online platforms”.

Amazon has said the law should focus on companies that distribute information and for which advertising was their primary revenue, while Zalando has said that too few customers visit its websites to be caught by the rules. Online groups that have 45mn monthly active users face special obligations under the DSA.

Even so, Amazon said it would provide more information on third-party sellers on its platform and has created a channel to allow users to report suspected illegal products.

Some smaller platforms, including Pinterest and Wikipedia, also meet the threshold for the most stringent compliance requirements. Wikipedia said it would publish more information on requests it received to alter or remove content.

EU officials expect some platforms to be late with their mandatory assessment reports, which will reveal how online platforms work to curb disinformation, illegal content and harmful products online. Regulators say they will fine latecomers. 

The Digital Markets Act, another significant piece of EU legislation aimed at curbing the power of Big Tech, comes into force at the start of next month.

Some DMA obligations, such as forcing platforms that are deemed “gatekeepers” to allow rival app stores or apps to be installed as alternatives will strike at the heart of how companies such as Apple have generated revenues.

“The very short time for implementation has created extra stress, we’ve needed lots of resources — both time and money we could have used to actually innovate,” said an executive at a large online platform caught by the DSA.

Additional reporting by Cristina Criddle in London