The European Union’s revolutionary new rules, announced next month, face huge challenges in the tech giant’s business model

Twenty years ago, the EU set up a regulatory environment for numbers. Two decades later, the Digital Services Act (DSA), to be enacted in December, overhauls content management on platforms such as Google and Facebook. The EU wants to use this revolutionary change to make tech giants more accountable for the content on their platforms and to ensure that competitors have a fair chance of beating big companies. At the same time, the move could hurt the giants’ business models.

Although Google has expressed concern about the upcoming rules. But with the exception of some lobbying, tech giants can’t stop the new rules in the short term.

When it comes to regulating the digital economy, the EU is a well-deserved global overlord. Twenty years ago, the EU established a regulatory environment for the digital economy. Now, the regulatory storm will escalate across the scale. The new European Union’s Digital Services Act (DSA), due in December, is revolutionary and overhauls content management on platforms such as Google and Facebook, CNBC london reported. The EU wants to make tech giants more accountable for the content of its platform and ensure that competitors have a fair chance of beating big companies. ‘It’s revolutionary,’ Thomas Vinje, a partner at Clifford Chance, told CNBC on Tuesday. The new rules could require big technology companies to ‘make significant changes in business practices and even business models.’ ‘

First, the Digital Services Act (DSA) is the meaning

Last month, Margrethe Vestager, the EU’s head of European competition, stressed in an online conversation about algorithms and democracy that one of the main objectives of the DSA was to protect democracy. ‘The new rules will… Require digital services, especially the largest platforms, to expose the ways in which they shape the digital world we see. ‘Make the platform more accountable for the decisions they make by ensuring transparency in the work of the platform’s algorithms.

The European Union's revolutionary new rules, announced next month, face huge challenges in the tech giant's business model

Last month, Margaret Verstappen, the EU’s head of European competition, outlined some of the main changes to the new digital bill in an online conversation about algorithms and democracy. Mr. Westag outlined some of the major changes to the new digital bill. At the platform level, for example, ‘platforms have to tell users how the recommendation system decides what to show – so we can more easily determine whether we want to trust the pictures they provide to our world.’ These platforms must provide periodic reports on their use of content review tools, as well as the accuracy and results of these tools. They have to tell us how they decide which information and products to recommend to us, what information and products to hide, and give us the ability to influence those decisions, rather than simply letting them make decisions for us. They have to tell us who’s paying for the ads we see and why we’re being targeted. ‘It means a lot to technology companies that have refused to disclose their algorithms for years. At the same time, these rules give users more power. For example, ‘digital services must inform users when they delete content and give them the right to challenge the effective right to delete content.’ ‘They also have to allow us to influence the choices that the referral system makes on our behalf. The Digital Services Act will also ensure regulators have the information they need to understand and manage how algorithms work. After all, researchers also need data to show how these algorithms affect society. The new rules will give all digital services the obligation to work with regulators. When regulators ask, the largest platforms must provide more information about how their algorithms work. They must also allow regulators and researchers access to the data they hold, including advertising files. These platforms, Verstappe stresses, are the tools that help us understand a lot of information, rather than the guardians who decide what we see and what we can’t see. ‘In terms of how the platform does business in Europe, the strict ban in the DSA discussion will be a tsunami. Nicolas Petit, professor of competition law at the European University Institute, said.

Two, long legal disputes

In recent years, the European Commission has launched high-profile investigations into companies such as Amazon, Facebook, Apple and Google, fearing that their market dominance is hampering competition. While artificial intelligence can filter information more efficiently, algorithmic ‘black boxes’ and those algorithmic biases and discrimination have always made European regulators sleepy. If we don’t know how the ‘black box’ makes its decision, we can’t challenge it.

Margrethe Verstappen is interviewed by the media in Brussels, Belgium. The investigations were led mainly by Margaret Westag, who took over in 2014. However, these investigations are often difficult to bring about real change, and European officials are disappointed by the lengthy legal action. In 2017, for example, Google was fined 2.4 billion euros ($2.81 billion) by the European Commission for promoting its own shopping comparison service rather than allowing competitors to access similar services. Google made some changes after that incident, but a study in September by Lademann and Associates showed that hasn’t changed much. According to the study, less than 1% of Google Shopping traffic shifts users to rival shopping sites. Recently, the European Commission’s decision to ask Ireland, a member of the European Union, to pay Apple 13 billion euros in back taxes was called into question.

In July, the European Court of Justice ruled that the European Commission had failed to prove that the Irish government had offered tax breaks to Apple. The European Commission has appealed the ruling, but it may be difficult to bear the burden of proof. ‘Perhaps the biggest challenge we face in enforcing the law is to ensure that we have the right legal framework and powers to keep the digital market competitive and fair. Westagle said in a public speech at the end of October.

Third, Google’s concerns

In an interview with CNBC on Monday, Georgios Petropoulos, a researcher at Bruegel, a Brussels-based think-tank, said tech giants were ‘anxious’ about the upcoming rules. Google has expressed its concern. Karan Bhatia, Google’s vice president of global government affairs and public policy, made a central argument in a blog post: DSA, you can’t hurt Europe’s economic recovery, can you? ‘We are concerned that some of the disclosed proposals will prevent global technology companies from serving the growing demand for users and businesses in Europe. Bathia explains that the new rules will not only prevent a handful of global technology companies like Google from building new digital tools, but will also affect the livelihoods of small businesses in Europe. For example, using Google Search to find ‘nearby Thai food’, Google Maps shows the location of the nearest restaurant and provides its contact information. Other links can be used to book a table directly, or takeaway. The DSA may prevent Google from developing such user-centric features. Not only does it affect the way people use our services, but it also affects thousands of restaurants, some of which have served millions of Diners in Europe this year through this free feature. The rule is also expected to affect Facebook, Amazon and Apple, and even smaller companies. ‘Many European start-ups, businessmen or developers are not keen on the upcoming rules’. Nicolas Petit said: ‘If any of them make a fortune in the market, the DSA rules will apply to them. ‘

What can large technology companies do?

Any proposals put forward by the European Commission next month must be approved by member states and the European Parliament. ‘It’s going to take us months to come up with comprehensive laws, which is a problem in the fast-growing technology market, but more importantly, these rules are only the first step, and enforcement is the key issue. Fitch Senior Industry Analyst Dexter Thillien told CNBC by email. He added that big technology companies ‘will use the legislative process, some of which has already begun), to highlight the negative impact on innovation and the economy as a whole, in an effort to make the final rules less stringent than the original proposal.’ But Vinje, of law firm Gao Weishen, says the tech giants can’t stop the new rules in the short term, apart from some lobbying. ‘They don’t have any real friends here. ‘