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EU passes landmark digital consumer protection regulations (forcing companies to share their algorithms with regulators for the purposes of enforcement)

The European Union (EU) Tuesday officially approved two landmark pieces of digital consumer protection legislation: the Digital Markets Act (DMA) and the Digital Services Act (DSA).

The packages, originally proposed in December 2020, includes bans on targeted advertising for children, dark patterns (apps that trick people into giving away personal information), companies favoring their own services, and companies preventing users from downloading other software. The legislation is also intended to promote competition.

The legislation also allows regulators to access so-called “black-box” algorithms, forcing companies to share their algorithms with regulators for the purposes of enforcement.

While consumer groups have largely celebrated the move, some have raised concerns over enforcement. The European Consumer Organization (BEUC) released a letter last week ahead of the vote, along with other consumer advocacy groups, calling for proper funding and staffing to enforce the laws. The letter states that:

If the Commission lacks the necessary resources and in-house expertise to ensure compliance, big tech companies would be unlikely to take seriously their responsibilities to comply. This would directly affect the effectiveness of the rules and compromise the achievement of their objectives. In this case, the legislation would soon lose credibility in the eyes of Europe’s citizens. Moreover, ineffective enforcement would undermine the respect the EU as a whole has earned for being the first jurisdiction in the world to tackle the excess power of Big Tech.

Commissioner Thierry Breton has responded to these concerns by releasing a blog post detailing exactly how the EU will address staffing and budget concerns. According to Breton, there will be a mandatory fee from internet companies (including Google, Amazon, Twitter, Facebook etc.) that will fund enforcement. There will also be hefty fees that will go to continued enforcement as well if the rules are broken. Breton also announced an ambitious 24 month plan to ramp up hiring, specifically for those with the relevant expertise. Breton reassured sceptics, saying:

This new Centre will attract world-class scientific talent in data science and algorithms that will complement and assist the enforcement teams. The new DG CONNECT teams dedicated to the DSA/DMA implementation, together with DG Competition, the Commission Legal Service and the JRC, and in cooperation with enforcement authorities in Member States, will make a powerful new digital regulator that has technology baked into its DNA from the start.

Article: EU passes landmark digital consumer protection regulations

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