Regulating the digital space

2 min Read

The regulation of online activity has always been problematic, with lawmakers trying to catch-up with technological developments and new modes of business and communication. However, with increased scrutiny of the major tech companies and their role in society and the economy, there appear to be renewed efforts to implement new controls and means of oversight. 

The Digital Services Act (DSA) and Digital Markets Act (DMA) are the two core elements of the EU's proposed legislative reform of the digital space.

One of the specific goals of the DSA is to improve the moderation of content on social media platforms, with a particular focus on illegal hate speech, terrorist content and unlawfully discriminatory content. The legislation aims to improve online content moderation in a number of ways, including through increased transparency.

There have been many examples in recent years of algorithmic systems that have been found to be inherently discriminatory, or which have inadvertently promoted hate speech. Independent algorithmic auditing and regulatory oversight are proposed as the means to ensure that algorithmic systems, and the organisations that implement them, comply with the rules of the DSA. Failure to comply with the proposed rules may result in fines or other forms of penalty payments.

The DMA, on the other hand, focuses primarily on perceived structural competition issues in digital markets across the EU. The DMA contains a raft of measures for ramping up the European Commission's powers and procedures in relation to monitoring, market investigations and the enforcement of penalties.

The EU is therefore taking significant steps towards increased regulation of the digital space. However, the EU's proposed legislative reform is part of a global trend of increasing scrutiny of major online platforms.

In the UK, the Competition and Markets Authority has called for a new regulatory framework to meet the challenges of the digital age. The UK Government has already proposed that any such framework should be overseen by a new body, the Digital Markets Unit. In the US, the US House of Representatives issued a report in October 2020 on competition in digital markets, which focused on the dominance of the major tech firms and the need for competition law reform to address the same.

It is clear that governments around the world are wrestling with the thorny issue of online regulation. The reform of the existing legal regime will continue to give rise to a number of interesting debates concerning competition, privacy, the freedom of speech and the responsibilities that private companies should bear for the protection and well-being of their customers.

Briefings Business Regulation Ricky Cella technology business communication