Navigating the new wave of EU tech regulations

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The EU’s executive body, the European Commission, recently unveiled its plans for new regulations to reshape the tech landscape and foster a more equitable digital environment. The latest move in this ongoing endeavor comes in the form of proposed regulations that could have far-reaching impacts on tech giants and startups alike. 

According to Dr. Gabriela Zanfir-Fortuna, VP for Global Privacy at the Future of Privacy Forum:

She states examples, such as:

  • A prohibition to present ads to users based on profiling them on the basis of sensitive personal data
  • A prohibition to present ads to minors based on profiling them “when they are aware with reasonable certainty that the recipient of the service is a minor”
  • An obligation to offer users an alternative feed of content that is not based on profiling as defined by the GDPR for the main parameters of their recommender systems

In a nutshell: The regulation (and why you should care) 

The new regulations went into force Friday, August 25, and address several key areas of concern within the tech sector. Notably, the act seeks to:

  1. Curb the dominance of tech giants
  2. Enhance data sharing and user control
  3. Bolster cybersecurity measures 

What this means for small and medium tech companies in the EU

For the time being, the rules only apply to platforms with more than 45 million users in the EU, including 19 of the world’s largest online platforms like Google, Meta, Amazon, and TikTok. The European Commission will run a “stress test” on select participating platforms to determine the efficacy of the Act’s rules for content moderation. 

This Act impacts small and medium-sized technology companies in the EU in a couple of different ways. Firstly, this Act will be key to ensuring healthy competition in the EU marketplace by ensuring a more level playing field. Secondly, beginning mid-February, the rules will apply to a variety of online platforms, regardless of size. Even though this imposes heavier restrictions on large tech companies, many are in favor.

As Brad Smith, President of Microsoft, explains:

A breakdown of three key points

1. Curb the dominance of tech giants with the Digital Services Act (DSA) and Digital Markets Act (DMA)

The Digital Services Act (DSA) and Digital Markets Act (DMA) represent the cornerstone of the proposed regulations. The DSA aims to hold online platforms accountable for content moderation, requiring them to remove illegal content and disinformation swiftly. 

The DMA targets large online platforms designated as “gatekeepers,” imposing stricter rules to ensure fair competition and prevent unfair practices that stifle smaller competitors.

Or, as Smith puts it, “intermediaries with significant market power are able to, in effect, distort the market and get in the way of a healthy growth opportunity for businesses that want to get their products and services to their customers, consumers or other businesses.”

2. Enhance data-sharing and user control

The EU’s new regulations underscore the significance of data as a driver of innovation. It introduces measures to facilitate data sharing while maintaining user control and privacy. The aim is to create a level playing field, enabling businesses of all sizes to benefit from data-driven insights.

3. Bolster cybersecurity measures with more robust cybersecurity and technology standards

The act emphasizes the need for robust security measures across digital services. It also touches upon establishing common technology standards, fostering interoperability, and reducing fragmentation in the tech landscape.

Looking Ahead

As the EU’s proposed regulations start to come into effect across the tech industry, stakeholders should closely watch how these measures evolve through legislative processes and negotiations. Striking the right balance between regulation and innovation will be a critical challenge for policymakers as they seek to create a digital landscape that is competitive, fair, and safe.

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