Big Tech companies brace for impact of EU regulations - Yahoo Finance

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The European Union's Digital Services Act is set to force major changes to how the biggest tech companies in the world operate. Yahoo Finance Tech Reporter Dan Howley explains that adjustments range from taking responsibility for illegal goods bought and sold on their platform to restrictions on marketing toward teens. Howley notes the range of companies impacted by this legislation, saying “any big tech company that you can think of is involved with this."

Video Transcript

DIANE KING HALL: Meantime, major tech companies are bracing for the impact due to be brought on from the EU Digital Services Act. Here to break down how this could change the online market space is Yahoo Finance's own Dan Howley. Dan, take it away.

DAN HOWLEY: That's right, Dan-- Diane, the Digital Services Act is going into effect today. Probably already in effect in Europe, obviously, with that time change. But what we want to talk about is some of the changes that are coming to companies or companies are going to have to begin putting into place as a result of this. And some have already been working on these changes before working with the EU to ensure that they're complying with these rules, which they must comply with or face stiff penalties.

So we'll just go over some of them real quick. We have-- they have to have measures in place to counter illegal goods and services that are sold through their platforms, whether that's on Amazon or Meta's marketplace-- Meta's Facebook Marketplace. They have to provide traceability of business users.

So if there are counterfeit goods, for instance-- we've heard about that being an issue on online marketplaces-- these companies now, the online platforms have to provide a way to trace these businesses to ensure that those illegal goods are then taken down. They also have to have transparency measures put into place. They have to provide researchers with access to their data.

They have to be transparent about the types of algorithms they have. And they also are no longer able to market towards teens based on some of their existing profile information. Basically, just the fact that they're teens is the only thing they can use.

You can also now-- and, again, this is all in the EU-- opt out of algorithms. So you don't need to use algorithmically-driven versions of websites, whether that's Meta, Instagram, X, what have you. You can just see a chronological order of people that you know rather than an algorithmically-driven version that's meant to get you to want to engage more with unknown users and have you spend more time online. They're also supposed to stop using so-called dark patterns, which are basically a means of designing a product to get people to want to use it, perhaps sign up for a service, or buy something that they otherwise wouldn't do if those dark patterns didn't exist.

So this is all something that the EU is forcing companies to comply with. If they don't, again, they'll face stiff penalties, the worst of which would be perhaps being kicked out of the EU altogether, though you can imagine the companies won't want to go that far. Amazon is already trying to challenge the rules on its own, saying it doesn't belong in a certain category of them. But any big tech company that you can think of is involved in this-- Apple, Microsoft, Google, Amazon, Meta, X, the entire like. So if you're a big tech firm, you're paying close attention today.

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