EU Digital Services Act tries to block profiling for targeted ads and seeks transparency

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The European Union (EU) will adopt the Digital Services Act, which is designed to be even more powerful than the Digital Markets Act. The new law will come into effect in 2024, and it would impact giants like Facebook that rely heavily on profiling users for targeted advertising.

EU’s Digital Services Act seeks to bring greater transparency about the algorithms that govern the majority of content served to social media users. Specifically speaking, the new law effectively bans ads that target individuals based on their religion, sexual orientation, ethnicity, or political affiliation. Moreover, no internet company will be allowed to serve targeted ads to minors.

Speaking about algorithms, the Digital Services Act will seek information and clarity about the processes used to display content to users. Additionally, social media companies will need to offer alternative systems that are not based on profiling. In other words, platforms would need to offer chronological feeds instead of content that is arranged by optimization algorithms aiming to boost engagement and drive-up ad exposure.

Speaking about the Digital Services Act, European Commission President Ursula von der Leyen said:

Today's agreement on the Digital Services Act is historic, both in terms of speed and of substance. It will ensure that the online environment remains a safe space, safeguarding freedom of expression and opportunities for digital businesses. It gives practical effect to the principle that what is illegal offline, should be illegal online.

Internet companies found violating the rules and regulations stipulated within the Digital Services Act could be fined up to six percent of their global turnover. Repeat offenders, or those companies that attempt to flout the guidelines, could also invite a temporary or permanent ban from operating or offering services within the EU.

Any company that has at least 45 million users in the EU will be required to comply with the Digital Services Act. Needless to add, aside from Google and Meta; Apple, Microsoft, Amazon, and Spotify too would have to comply with the new laws.

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