The DSA: A Game-Changer for Tech Giants and Product Design
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Understanding the Shift in Tech Regulation
Europe is once again making waves in the tech world. Unlike the USA, China, or Russia, the continent has struggled to create its own tech giants. However, the European Commission has realized that it can serve as a referee rather than just a player in the tech arena.
The introduction of the GDPR marked the beginning of this regulatory shift, compelling websites and apps globally to provide users with the option to reject cookies. While some platforms adapted to comply, others continued to enforce cookie acceptance outside of Europe. The GDPR has fundamentally altered the data landscape, proving that established practices in the digital realm can be radically transformed.
The Influence of European Regulation
Not everyone embraces laws that originate in Europe, particularly when they affect American firms. Recently, France's data protection authority imposed a hefty fine on Google, prompting the tech giant to revise its cookie management policy. This led to the introduction of a one-click option for European users to refuse cookies, significantly impacting targeted advertising.
By leveraging political and legal tools, Europe is equipping itself to regulate web giants and compel them to change their practices. Historically, Europe has been cautious, fearing another world war, which led to strict regulations on industries such as steel. Some argue that data should be similarly controlled to prevent companies from profiting at the expense of users. In contrast, the USA has maintained a more laissez-faire approach, allowing market forces to dictate wages, social support, and healthcare.
As a new law emerges in the EU that could redefine how companies design products—particularly GAFAM and other tech giants—it is crucial to understand the implications of the Digital Services Act (DSA).
What Does the DSA Entail?
The Digital Services Act is aimed at safeguarding Internet users from illegal content. It primarily targets issues such as pornographic material, counterfeit goods, and hate speech. As Ursula Von Der Leyen stated, "What is illegal in the real world must also be illegal on the Internet."
Under the DSA, all digital services with over 45 million monthly users will be required to implement measures against illegal or borderline content, including hate speech. They must also clarify how their algorithms operate. For instance, YouTube will need to explain why certain videos trend while others are hidden, and Meta must reveal why specific content appears in users' feeds.
This law will impose stricter controls on digital platforms, requiring them to justify their algorithms much like one would explain the workings of a complex industrial machine. Companies that fail to comply could face fines of up to 6% of their annual revenue, a deterrent even for the most powerful corporations.
The first video explains the implications of the EU's Digital Services Act, which has been expanded to include more tech companies and their responsibilities.
Implications for Product Design
Experts have raised concerns about the DSA, particularly regarding the opacity of algorithms. Major tech companies like Google, Meta, and Microsoft often rely on complex codes that consist of millions, if not billions, of lines. Modern software employs artificial intelligence and deep learning, making it challenging to explain algorithmic processes in detail.
In a notable case, a Google representative struggled to clarify why a search for "idiot" yielded images of Donald Trump. With the DSA in place, such vague explanations will not suffice; representatives must provide detailed accounts of how algorithms function.
Judges will likely reject evasive answers, and failure to adequately defend algorithm operations could result in penalties. This will necessitate a reevaluation of product design, as companies will need to document and justify each feature.
The emergence of a potential new role—“digital archivist”—may arise from this need, responsible for tracking product evolution and the rationale behind design decisions. Additionally, product designers will need to integrate legal considerations into new features, ensuring compliance while balancing user freedom of expression.
Navigating New Constraints and Opportunities
While the DSA adds considerable constraints to companies, it also opens doors for creative solutions to issues that have long been ignored. For example, YouTube's algorithm currently penalizes content creators for using copyrighted music, even in brief clips. If required to justify this algorithm in court, it may lead to modifications that better balance the rights of content creators with copyright protections.
By taking on the role of regulator, the EU has found a way to influence the digital landscape despite not having a significant number of homegrown tech giants. The GDPR has already transformed how data is collected by websites in Europe, and there is little doubt that the DSA will have a profound impact on GAFAM, unicorns, and product design as a whole.
The second video discusses the DOJ's lawsuit against RealPage for an algorithmic pricing scheme that negatively impacts millions of American renters, demonstrating the regulatory challenges facing technology companies.
