Authored by:

Gianna, Privacy Engineering Consultant at Tueoris

The European Union (EU) is recognized as a leading tech regulator, advancing comprehensive laws such as the General Data Protection Regulation (GDPR) for consumer privacy, the Digital Markets Act (DMA) to regulate major tech platforms, and the Digital Services Act (DSA) to curb misinformation and restrict targeted advertising based on sensitive data. The following are the overviews and highlights of the recently DMA and DSA:

The Digital Markets Act: A New Era of Fair Play in Digital Markets

The Digital Markets Act (DMA) represents a significant step forward in the European Union’s efforts to create a balanced and equitable digital marketplace. Adopted by the Council on July 18, 2022, and effective from May 2, 2023, the DMA is designed to ensure that all digital companies, big and small, operate on a level playing field. Here’s a closer look at how this groundbreaking legislation is set to reshape the digital landscape.

Curbing Unfair Practices

At the heart of the DMA is its commitment to curbing unfair practices by dominant online platforms, often referred to as “gatekeepers.” These are companies that provide critical “core platform services” and hold significant market power. The DMA aims to prevent these giants from abusing their position in several ways, including banning them from favoring their own products or services over those of competitors, or from preventing users from installing apps or services from other sources.

Empowering Businesses and Consumers

One of the key benefits of the DMA is its potential to empower business users and, by extension, consumers. By prohibiting certain restrictive practices by gatekeepers, the DMA enables businesses to offer more choices to consumers. This is expected to lead to better services and fairer prices across the board, enriching the consumer experience in the digital domain.

Ensuring Fair Rights and Promoting Innovation

The DMA clearly defines the rights and obligations of large online platforms, ensuring they cannot exploit their formidable position to stifle competition. This clarity is not only beneficial for current market players but also promotes innovation and provides a nurturing environment for tech start-ups. By establishing a fairer online platform environment, the DMA encourages creativity and technological advancement, which are vital for the health and growth of the digital economy.

The Digital Service Act: A Focus on Targeted Advertising

The Digital Services Act (DSA) imposes stringent requirements on large online platforms, including intermediary services providers (e.g., social media platforms, internet service providers, cloud providers, search engines, online marketplaces, among others), to combat misinformation and restrict hyper-personalized advertising. The DSA, which began taking effect for major platforms in 2023, mandates significant measures to eliminate hate speech and bans targeted ads based on sensitive personal data. Here’s a closer look at what are the DSA rules on targeted advertising.

Transparency Requirements

Transparency is another key aspect of the DSA. Online platforms are now required to clearly communicate several details about the advertisements they display:

• Ad Identification: Ads must be clearly marked as such, ensuring users can easily distinguish promotional content from other types of information.
• Advertiser Identity: Platforms must disclose the identity of both the person or entity on whose behalf the ad is displayed, and if different, the person or entity who paid for the ad.
• Ad Targeting Criteria: There should be a clear explanation of the main parameters determining who sees the advertisement. This could depend on whether the ad is contextual (based on the content being viewed) or based on other criteria.
• Parameter Adjustment: Users should have access to a procedure to modify the parameters that determine how ads are targeted to them.

Ad Repositories

To further promote accountability and oversight, online platforms are required to maintain ads repositories. These repositories should provide detailed information about the content of targeted advertisements, allowing for better company oversight and regulatory compliance. This measure not only increases transparency but also enhances the ability of regulatory bodies to monitor and enforce compliance with advertising standards.

Protection of Minors

One of the cornerstone provisions of the DSA focuses on the protection of minors. Online platforms that have reasonable certainty that their user base includes minors are prohibited from displaying targeted advertisements that use minors’ personal data for profiling. This rule underscores the importance of prioritizing the privacy, security, and safety of young users in digital spaces. Platforms are mandated to implement high-level protective measures to safeguard minors from exploitative advertising practices.

Summary

Both the DMA and DSA are cornerstones in the EU’s efforts to safeguard consumers and promote a healthy, competitive digital economy. As these regulations take effect, they promise to reshape the digital landscape into a more dynamic and fair market for companies and consumers alike.

Social media platforms are under stringent regulation within the European Union, facing severe penalties for violations of privacy laws. This was exemplified when Meta was fined nearly $1.3 billion for improperly transferring user data between the United States and the EU/European Economic Area, marking the largest fine imposed by an EU regulator on a tech company since 2021. This incident underscores the EU’s firm stance on privacy compliance. However, the introduction of the new EU-US Data Privacy Framework aims to mitigate future issues and fines related to data transfers, promoting clearer guidelines and better compliance.

Tueoris has extensive experience in managing privacy risks associated with adtech and in enhancing your privacy programs. For questions regarding this post or your organizations’ privacy program, please contact [email protected].