(Daily Caller)—The European Union’s (EU) regulatory agenda will largely hit U.S. technology companies and will impact Americans’ speech and lifestyle by stifling innovation, experts told the Daily Caller News Foundation.
The EU laws consist of content moderation regulation, antitrust enforcement and artificial intelligence (AI) model rules, all carrying massive financial penalties for violation. The laws apply to platforms that have large user bases in the EU, which are mainly American companies, with the EU recently launching a formal investigation into billionaire Elon Musk’s X and bipartisan lawmakers pushing President Joe Biden to ensure the regulation does not harm U.S. firms unfairly, according to Reuters.
“The EU views industry regulations as aspirational, which means there’s an element of selective enforcement and only require industry to put good-faith efforts when complying,” Joel Thayer, president of the Digital Progress Institute, told the DCNF. “It’s why they are far more strident. … Therein lies the problem, the EU can turn the dial up or down on how fervently they will regulate. Given how broad all of these laws are—particularly the AI Act, this means that every company that either creates software, distributes software, or has it in their devices are implicated. The EU’s laws now encompass everything from social media to children’s toys.”
The EU’s Digital Services Act (DSA) went into effect in August, and it punishes “very large online platforms” for hosting content like “illegal hate speech” and “disinformation” with fines of up to 6% of their annual global revenue.
The EU defines “hate speech” as “public incitement to violence or hatred directed against a group of persons or a member of such a group defined on the basis of race, colour, descent, religion or belief, or national or ethnic origin,” according to its law. Hate speech is not illegal in the United States under the First Amendment.
The DSA could lead to censorship of Americans because companies are incentivized to enforce the same rules worldwide.
“The European Union isn’t hiding the ball here,” James Czerniawski, senior policy analyst at Americans for Prosperity, told the DCNF. “Given the global nature of the internet, coupled with their blatant targeting of American tech firms under the DSA and DMA [Digital Markets Act], these proposals are going to impact the online experience of millions of Americans.”
Czerniawski noted the investigation the EU launched into X for not censoring content adequately as an example of how this law impacts Americans. The EU is examining X’s lack of suppression of “illegal content” and “disinformation,” as well as its advertising practices, according to a European Commission (EC) announcement.
Germany enacted the Network Enforcement Act in 2017 to censor hate speech and false news, imposing large financial penalties, according to the Library of Congress. This law was the precursor to these newer laws leading to American censorship, Mike Benz, executive director of the Foundation for Freedom Online, told the DCNF.
“This is not a new or hypothetical event,” Benz asserted. “Mass censorship in the US began with European censorship laws in 2017, notably Germany’s NetzDG censorship law that functionally required AI censorship technology to comply with. This forced YouTube, Facebook and Twitter to begin adopting AI censorship techniques across the board for continuity with global markets, boomeranging back on Americans.”
Stanford Cyber Policy Center Platform Regulation Director Daphne Keller praised the DSA because of the effects it will have globally, not just in the EU, in a November 2022 article. Stanford Internet Observatory is part of the Cyber Policy Center and participated in the Election Integrity Partnership that worked to censor Americans during the 2020 elections.
“These EU censorship laws are … also designed to force platforms to hire more censors, who in turn will focus on US affairs,” Benz added. “This is why the Stanford Internet Observatory is salivating over the EU censorship laws: they know it will rig the game here in the US.”
However, the EC has denied that the DSA is about censorship in previous comments to the DCNF, stating that it maintains freedom of expression.
The DMA is antitrust regulation specifically targeting platforms with dominant market positions in the EU that are “gatekeepers,” meaning they “provide an important gateway between businesses and consumers in relation to core platform services,” according to the EC. These “gatekeepers” include American companies like Alphabet, Meta, Apple and Amazon; the DMA could limit their influence in the EU by prohibiting them from operating in a way that gives their products and services special advantages, such as app stores, search engines and web browsers.
For instance, it makes it illegal to force companies to use a platform’s payment system to be on their app store, accordingto the EC.
Democratic lawmakers recently advocated for Biden to allow the EU to enforce the DMA on American companies because it aligns with his administration’s agenda, according to a December letter.
“The criteria for the designation of gatekeepers are clearly set out in the DMA: they target companies that have a significant impact on the EU internal market, that operate as an important gateway for business users to reach end users and that have – or will have in the near future – an entrenched and durable position for their core platform services,” EC spokesman Johannes Bahrke told the DCNF. “All companies active in the EU are subject to EU rules, including the DSA and the DMA, irrespective of their place of establishment.”
The DMA includes penalties of up to 10% of a company’s annual global revenue, according to the EC.
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“The EC can use the law to be retaliatory. Keep in mind that Article 4 allows the EC to reconsider each company’s ‘gatekeeper’ designation,” Thayer told the DCNF. “The EU can negotiate with Google to keep it off the EC’s gatekeeper list provided that it combats ‘misinformation.’ Or arbitrarily designate X as a ‘gatekeeper’ (not currently listed) simply because they don’t like Elon Musk’s decision to allow more offensive content on its platform. Frankly, there’s a strong case that the DMA can lead to more government jawboning in the EU.”
The AI Act is the newest tech regulatory development, as EU lawmakers reached a landmark agreement on it in December, according to The New York Times. It is sweeping regulation on AI, which is yet another U.S.-dominated industry.
The law contains ethical and safety standards that AI models must adhere to, including being “non-discriminatory.” It also states that “AI used to exploit the vulnerabilities of people (due to their age, disability, social or economic situation)” is considered a “banned application,” according to the agreement; the law contains penalties of up to 7% of annual global revenue.
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