When you see a "tailor-made" advertisement on social media, have you ever wondered who's pulling the strings behind the scenes? The European Union's new Digital Services Act (DSA) aims to lift this veil of secrecy and impose unprecedented constraints on how major tech companies operate. The implementation of this legislation will undoubtedly bring profound changes to tech giants including Amazon, Google, and Meta, particularly in their advertising strategies.
DSA: A "New Order" for the Digital World
The EU's Digital Services Act is a regulation designed to oversee large tech companies' online content moderation and promote fair market competition. The law requires platform operators to assume greater responsibility, including proactively preventing the spread of harmful content, restricting inappropriate user behavior, and sharing internal data with regulators and researchers.
Companies violating DSA provisions face fines up to 6% of their global revenue, with repeat offenders potentially being banned from operating in Europe entirely.
The EU has initially identified 19 platforms subject to the highest level of regulation, each serving more than 45 million users - representing 10% of the EU's population. The list includes eight social media platforms (Facebook, TikTok, Twitter, YouTube, Instagram, LinkedIn, Pinterest and Snapchat), five online marketplaces (Amazon, AliExpress, Zalando, Google Shopping), two mobile app stores (Google Play and App Store), two search engines (Google and Bing), plus Google Maps and Wikipedia.
Notably, this list isn't final. Industry observers note that platforms like eBay and Netflix haven't been included. Under DSA rules, all companies providing digital services to European users must comply, though platforms with smaller user bases face relatively relaxed regulations and receive an additional six-month grace period.
Tech Giants' Compliance Strategies
Facing the impending regulatory storm, major platforms are taking measures to adapt to DSA requirements.
Amazon has established new channels for users to report suspicious illegal products while increasing transparency about third-party sellers. These moves aim to enhance platform security and reduce counterfeit goods circulation.
TikTok introduced "additional reporting options" allowing users to flag content they consider illegal, including hate speech, harassment, misinformation and fraudulent information. Users can also report ads directly. Parent company ByteDance stated it would assemble specialized teams to review these reports and determine removal based on policies and regulations. TikTok will explain removal decisions to both content creators and reporters while permitting appeals.
Additionally, TikTok now lets users disable personalized recommendation algorithms that suggest videos based on viewing history. Facebook, Instagram and Snapchat offer similar options, granting users greater control.
Advertising: Protecting Vulnerable Groups Becomes Priority
Regarding advertising, the DSA explicitly prohibits targeting vulnerable groups (including children). This forces tech companies to reevaluate ad strategies and avoid using algorithms to push inappropriate content to minors.
Snapchat announced advertisers can no longer use personalized optimization tools for EU and UK teenagers. For users 18+, ad delivery will become more transparent with enhanced user control over ad types. This measure protects youth from harmful advertising influences.
Both Meta and TikTok emphasized they absolutely prohibit hate speech on their platforms, committing to regular review and improvement of related processes. These pledges demonstrate platforms are taking DSA requirements seriously while working toward healthier online environments.
Challenges and Resistance: Not Everyone Complies Willingly
While most platforms express willingness to cooperate with DSA implementation, some companies raised objections.
German online fashion retailer Zalando legally challenged its inclusion on the DSA's major platforms list, claiming unfair treatment since its monthly active users fall below the 45 million threshold. Nevertheless, Zalando implemented some changes to meet DSA requirements.
Amazon filed a similar lawsuit arguing some larger competitors weren't listed. These cases reflect corporate concerns about DSA implementation details and fairness.
Regulatory impacts on business development prove significant. Whether willing or not, listed platforms must strive to comply. Some even delayed new product launches due to policy uncertainties - Meta postponed introducing Threads (its Twitter competitor) in the EU citing regulatory unpredictability.
DSA's Impact Extends Beyond Fines
The DSA's influence reaches far beyond financial penalties. It compels major tech companies to alter business models with greater focus on user privacy and content safety, creating ripple effects throughout the digital ecosystem.
First, compliance costs will rise significantly as companies invest resources to upgrade content moderation systems, user privacy protections and algorithm transparency.
Second, innovation may slow as stricter regulations make companies more cautious when launching new products and services.
Third, platform-user relationships will transform as individuals gain more control over personal data and content, potentially fostering more trustworthy, transparent digital environments.
Future Outlook: A New Global Standard for Digital Regulation
The EU's DSA will likely become a new global benchmark for digital regulation. Other nations and regions may emulate its approach to oversee major tech companies' conduct.
Future digital regulations will undoubtedly grow stricter, increasing compliance pressures on tech firms. Only companies adapting to new rules while actively fulfilling social responsibilities will thrive in competitive markets. For consumers, a safer, more transparent and equitable digital world awaits.
The DSA's implementation marks digital technology entering a new era where tech companies can no longer operate as unchecked wild horses but must follow rules and shoulder responsibilities as corporate citizens. This may represent the proper direction for healthy digital economic development.