In the ongoing battle within the EU to regulate multinational corporations, led by European Union antitrust chief Margrethe Vestager, Apple has been ordered to pay Ireland €13bn ($14.4bn) in back taxes, while Google has been fined €2.4bn ($2.7bn) for antitrust violations.

Vestager, who has made a name for herself going after Big Tech’s tax arrangements within the EU, said in a post on X, “Today is a huge win for European citizens and tax justice.”

One bad Apple

The case against Apple goes back to 2016 when the European Commission accused the company of receiving illegal tax benefits from Ireland.

According to the Commission, Apple’s subsidiaries in Ireland paid a much lower tax rate than other companies — as low as 0.005% in 2014 — a practice that violated EU state aid rules.

The Irish government, however, sided with Apple, arguing that the arrangement was lawful, stating that its low corporate tax rate is an essential tool in attracting foreign investment.

In 2020, the General Court of the CJEU issued a judgement annulling the Commission’s case, but the Commission appealed the judgement, and the Court has now ruled its 2016 decision stands.

In an official statement after the latest judgement, the Irish Department of Finance said: “The Irish position has always been that Ireland does not give preferential tax treatment to any companies or taxpayers.”

Apple vehemently denied the European Commission’s accusations, insisting it complied with both US and Irish tax laws.

“This case has never been about how much tax we pay, but which government we are required to pay it to,” an Apple spokesperson said. “We always pay all the taxes we owe wherever we operate, and there has never been a special deal.”

The iPhone 16 manufacturer maintained that its income was already subject to taxation in the US and that the Commission was trying to rewrite the rules retroactively.

Despite this, the Court ruled in favour of the Commission, and Apple must now repay the taxes.

In Google, we antitrust

The case against Google dates back to 2017 when the European Commission fined the company for abusing its online shopping comparison market dominance.

According to the Commission, Google gave preferential treatment to its own comparison-shopping service, disadvantaging smaller rivals.

The fine was the EU’s largest antitrust penalty ever issued at the time, totalling €2.4bn ($2.7bn) — until 2018, when the EU fined Google €4.3bn ($4.75bn) for abusing the dominant position of its Android mobile operating system to promote Google’s search engine.

Google has consistently contested the EU’s decision, arguing that its practices improved the quality of its services for consumers.

The company adjusted its shopping service in 2017 to comply with the EU’s ruling but continued to appeal the fine.

In a statement, Google said of its adjustments: “Our approach has worked successfully for more than seven years, generating billions of clicks for more than 800 comparison shopping services.”

Despite these efforts, in its latest ruling, the Court solidified the Commission’s stance that Google abused its market position and that it was right to find Google’s conduct “discriminatory” and its appeal “must be dismissed in its entirety.”

Google faces another similar trial in the UK as a London court has argued that Google should pay £13.6bn in a lawsuit over whether it has too much influence on the online advertising market.

Who EU gonna call?

The cases were undoubtedly being closely observed across the EU as a significant moment for Big Tech’s European tax affairs — especially as the EU’s investigations between companies and member states have faced setbacks.

Just last year, Amazon successfully defended its tax arrangements in Luxembourg in a court battle, and the Commission similarly lost a case involving the Netherlands’ tax treatment of Starbucks, though it chose not to appeal.

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The report, titled “AI-Enabled Influence Operations: The Threat to the UK General Election”, finds that while AI’s current impact on specific election results is limited, it poses broader risks to the democratic system.

These include a “degraded and polarised information space” and online harassment through deepfakes. AI could enhance these kinds of threats across the various stages of the UK general election cycle.

The report found that only 19 of 112 national elections since January 2023 showed AI interference. It also found no clear evidence that election results significantly differed from polling data.

However, the confusion created by AI-generated content has damaged trust in online sources, according to the report. Deepfakes have incited online hate against political figures, and politicians could exploit AI disinformation for electoral gain.

Earlier this year, London Mayor Sadiq Khan called for a crackdown on disinformation after a deepfake audio of his voice making inflammatory remarks before the UK’s Remembrance Weekend commemorations was leaked.

Though examples of AI misuse are scarce, they are often amplified through mainstream media, inflating public anxieties about AI’s threat to electoral processes.

The report is the first of two CETaS publications on AI and election security — the second will be published in September — and identifies three categories of election security threats.

Campaign threats that aim to manipulate voter behaviour or attitudes toward candidates or political issues; information threats that seek to undermine the quality of the information environment, confuse voters, and damage the integrity of electoral outcomes; and infrastructure threats target the systems and individuals responsible for securing election processes — using tactics such as ‘hack and leak‘ operations and AI-generated phishing emails against election officials.

The report stresses the urgency of addressing ambiguous electoral laws on AI use, which both domestic and foreign actors could exploit. For example, political parties might misuse AI to fabricate campaign endorsements, undermining the election process.

However, with the UK general election set for 4th July, there is limited time to enhance election security protections.

According to the report, “ambiguous electoral laws on AI use during elections are currently resulting in misuse.”

The Labour Party has expressed concerns about social media platform X’s refusal to remove deepfake audio clips of party leader Sir Keir Starmer from October 2023. Some of these clips have received 1.5 million views.

As such, CETaS calls for immediate actions, including setting more explicit expectations on AI use for political parties and media organisations and analysing data from recent UK local elections to inform contingency planning.

Further suggestions include issuing ‘fair AI use’ guidelines and voluntary agreements for political parties, supporting media with AI threat reporting tools, and launching public AI awareness campaigns.

CETaS has developed a timeline mapping potential AI threats to the UK general election and corresponding countermeasures.

The timeline shows when threats will likely emerge and what outcomes they aim to achieve from pre- to post-election. It’s based on evidence from recent elections and academic literature and estimates the time windows for interventions to mitigate these threats.

The report underscores a pressing need for a coordinated, “whole-of-government” approach to safeguard the integrity of the upcoming UK general election.

With the election date rapidly approaching, the window for implementing robust security measures is narrowing. CETaS concludes that immediate action is essential to mitigate AI-generated threats and ensure public trust in the democratic process.

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Earlier this month, at the inaugural SIM Conference in Porto, Portugal, a panel of experts — moderated by European Parliament cabinet member Catarina Peyroteo Saltier — outlined the evolving regulatory landscape in front of a dimly lit room full of tech-oriented minds.

With the EU AI Act set to shape the future of enterprise technology on the continent, here are TI’s takeaways from the “Regulatory Impact on AI: Doing No Significant Harm” panel.

A divided vision of AI’s future

As is the case with many topics, the diverse political structure within the EU has led to ideological divides within the European Parliament, according to Kai Zenner, head of office and digital policy adviser for Member of European Parliament (MEP) Axel Voss.

“50% have indicated already that they are rather afraid of this new technology, all of its new possibilities and so on — making references to the social benefits scandal in the Netherlands,” he explained.

The scandal in question refers to the Dutch tax authority’s use of an algorithm to detect benefits fraud in 2013. It led to thousands of families, particularly those with lower incomes or from ethnic minorities, being unjustly penalised, resulting in poverty, suicides, and over a thousand children being taken into foster care.

“On the other side, 50% are really trying to foster AI development and saying we can use AI to make the world a better place and fight against climate change,” he said.

This divide reflects broader global debates on the balance between harnessing AI’s potential for good and mitigating its risks.

Zenner, who is also part of a ‘network of experts’ supporting the UN Secretary-General’s ‘High-Level Advisory Body on AI’, pointed out that the dynamic nature of AI creates further challenges for regulators: “When the commission was coming out with their original proposal for the AI Act, it was already outdated.”

“The commission was not really thinking [about ChatGPT and foundation models] when they prepared the AI Act in 2019/20,” he added. “In the European Union, there was a big push to finish the Act in time for the elections coming up. I think it would have been better if we took a little bit more time.”

This comes after the European Parliament gave the AI Act the final green light this week, making it the world’s first major law regulating AI.

National quests for innovation

European countries such as France, Spain, and Portugal have begun creating their own national AI strategies. However, according to Saltier, the EU lags behind in AI innovation compared with other regions.

When asked how national governments can address the EU’s shortcomings, Manuel Caldeira Cabral, former Portuguese minister of economy and current deputy of the Portuguese Assembly of the Republic, clarified which side of the fence he sits on.

He called on national governments to prioritise AI’s opportunities, especially those related to enhancing public services and fostering competitive markets: “As a professor, I can’t say to my students, ‘You can’t use AI. You have to work like it’s the Middle Ages, writing it all out.’” he said.

“National strategies shouldn’t be about regulating to avoid the dangers of AI down the road; it has to be about the opportunities and how to use them to grow faster, implement within new areas, and create better services for the people,” he added.

He suggested that the EU take a positive outlook on AI, advocating for regulations that foster growth and innovation rather than stifle it with overbearing restrictions.

“The consensus about having the best possible legislation, better than the US or China, has led us to a situation where most of the data-intensive start-ups grow faster in the US or China than they manage to in the EU.”

He warned that if this continues, EU firms won’t be able to keep up and will be bought up by firms in the US or China. He added that this could leave EU data vulnerable to foreign businesses, and we would have to trust that they won’t use it nefariously.

Regulatory Sandboxes

Zenner discussed how regulatory sandboxes could bridge the gap between regulation and innovation, explaining how they could “play a major role in enabling SMEs and start-ups to get compliant by entering a very close dialogue with the regulators and enforcers. I think that will help and give them a competitive edge.”

Caldeira Cabral added: “In financial services — which is quite a sensible area — in Portugal, we have worked with firms to help them comply with the regulations instead of waiting for them to do the things they know they should. We help them make things better in a way that produces better results for the community without stopping them or dragging them back. Dragging them back leads to them dying on the beach.”

His sentiment clearly resonated, eliciting applause from a few audience members.

International cooperation and the start-up ecosystem

Luther Lowe, head of public policy at start-up accelerator Y Combinator, joined the panel later.

He brought his Silicon Valley perspective to the discussion, highlighting the global nature of start-ups and the importance of international cooperation in AI development.

“Every year, we fund about 500 companies. About half of those are AI businesses. When you’re a founder, and you’re looking to identify where to put your flag, you want someplace that’s not going to require you to undertake something too burdensome,” he said.

Lowe commented on recent legislative developments in California, which echo elements of the EU AI Act, pointing to a growing consensus on the need for ethical and safe AI development practices.

However, he also cautioned against regulations that could stifle small-scale innovation.

“I think it has given some pause to some of the VCs and developers. It’s still very early, but I think we want to ensure we’re protecting open-source development.” He continued, “For example, if I’m tinkering on a small company and exploring how to build something new with generative AI, I don’t want to have to register with the government for some marginal project.”

Caldeira Cabral supported Lowe’s position, citing that centralised regulations were more effective than each European country creating their own bespoke regulations.

“Having rules is a good thing for firms because they know what they can and can’t do — but not overregulating, or this idea of having licences for each of the 27 countries in the EU. We really don’t want to say to start-ups, ‘If you don’t want to adhere to 27 different licenses from different governments, you’d better go somewhere else.’”

When asked what he was most excited about in terms of regulation from Europe, Lowe mentioned the Digital Markets Act (DMA): “If you think about the ability of a law to curb the self-preference of the gatekeepers and introduce a lot more oxygen into the markets, that’s going to unlock a lot of opportunity,” he said.

Caldeira Cabral spoke of the difficulties of having multiple sets of regulations for different regions: “I think we have to be realistic about what we can impose onto our firms, what we can impose onto the world, and how we negotiate with the world.

“I don’t know if the United States wants to negotiate with the European Union. Today? Yes, if we are reasonable. But by the end of the year, I don’t know what kind of America they’re going to have — and China may negotiate everything but then do whatever they want anyway.”

“This doesn’t mean that we should have no rules, but we should be careful about the side effects of having too many rules.”

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The meeting, between US Secretary of State Antony Blinken and China’s Foreign Minister Wang Yi, seeks to mitigate misunderstandings and foster a constructive exchange on AI’s implications for global security.

The US has been vocal about its concerns over China’s rapid AI advancements, emphasising the need for direct communication to safeguard its interests and those of its allies.

Despite the competitive undercurrents, both nations appear to recognise the potential benefits of establishing universal AI norms.

Michal Szymczak, head of AI strategy at software consultancy Zartis, said the talks between the two opposing nations were significant.

“While the White House has made it clear it’s not willing to budge on AI policies, any chance to introduce any parity on AI regulation between China and the West should be explored and are most welcome.”

According to Szymczak,  the quality of AI products and considerations like data privacy, intellectual property, and fairness will be crucial in determining consumer and enterprise preferences.

“For China to successfully export its AI technology to Western markets, it must ensure its products adhere to stringent local regulations to circumvent potential sanctions — similar to the challenges faced by companies like TikTok and Huawei.”

“These factors will likely influence consumer and enterprise decisions, with preferences leaning towards services that offer comprehensive, long-term support in these areas,” he said.

The Geneva talks represent a critical step in navigating the complex landscape of AI governance. However, Szymczak predicts a lack of trust will be a cause for concern.

“It is likely that nations will safeguard their strategic sectors, such as healthcare and energy, from foreign AI service providers until the technology matures and reliable safeguards are established,” he said.

He concludes on the privacy issue: “Significant concerns remain regarding the control users have over their data, and the scope of data collection, which could be pivotal in determining the success of AI solutions as consumers and governments become increasingly aware of and concerned about these issues.”

Stay informed with the latest tech updates and news analysis with TechInformed

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Encouraging sustainable practices has been a longstanding goal of the EU, with the European Green Deal being the backbone of this effort. In a bid to support a more sustainable future, the European Parliament and Council of EU member states recently announced new ecodesign rules in the form of the Ecodesign for Sustainable Products Regulation (ESPR). This is a published framework that will set the design requirements of products to reduce pressure on natural resources and keep resources in the economy for longer. A central part of this framework is the Digital Product Passport (DPP), which will be mandated across several key industries.

In this article I will outline what DPPs are, how and why they will form a central part of the EU’s new plans, and what businesses can do to prepare.

Decoding digital product passports

DPPs are a tool for collecting and sharing product data throughout a product’s entire lifecycle. This data can be recorded from across the supply chain and can include information on the manufacturing process, components, raw material sourcing, and much more. Information is typically accessed through a data carrier like a QR code or barcode, with data being accessed by a device such as a smartphone reading a physical label on the product.

If we think of this in practice, for a laptop, a DPP can provide information on when it was manufactured, the carbon footprint of the manufacturing process, previous ownership, information on spare parts, and how a user can dispose of it responsibly when it comes to the end of its life.

This is precisely why the EU sees them as the perfect tool in helping to increase transparency around a product’s sustainability, environmental and recyclability attributes. Businesses can make efforts to make more informed decisions about purchasing materials from sustainable suppliers, and end-users can make more informed purchasing decisions that contribute to the demand for more sustainable products.

Unpacking regulation

With the mandate applying to numerous product groups across multiple industries that place products on the EU market – regardless of whether or not they were produced there – it will apply to a broad range of businesses.

The electronics and ICT industry has been earmarked as one of the first industries that it will apply to, due to the impact of e-waste, and the high potential for circularity within the industry. According to the World Health Organisation, e-waste is the fastest growing solid waste stream in the world, increasing three times faster than the world’s population, and according to a study from BT, 41% of UK consumers have electrical waste at home.

When it comes to e-waste specifically, the problem isn’t just the volume of waste produced, but the nature of the waste and the risks it can pose to consumers. Some materials used to produce electronics can be hazardous and harmful if they’re not disposed of responsibly. In addition to creating more transparency surrounding the sourcing and sustainability of materials, DPPs also offer insights into the precise composition of a product and guidelines on its safe and responsible disposal or recycling. This represents a pioneering effort to push the responsible and effective management of products at end-of-life by enhancing education and access to information.

How to prepare

As a first step, businesses should select a DPP lead, or team, within the company who – in addition to leading the effort for implementation – will keep abreast of regulatory updates. This should involve gaining an understanding of the requirements currently outlined in key legislation such as the ESPR, and what will be decided at a later date. This should also involve bringing together the right internal stakeholders and external partners to assess the current set-up of the business and its supply chain to determine the best next steps. Every organisation is unique, and having a clear view of what compliance looks like for each business specifically is an important task to support the creation of a strategy.

Only after this process should a business begin to create a DPP strategy which outlines clear goals and actions based on the comprehensive research and preparation that has come before it. At this stage, clear milestones and timelines can begin to take shape and be defined, and initial preparation steps such as the identification of data points can begin to happen. It is crucial however that these first steps are approached with care and trusted partners are identified sooner to set the course for successful implementation.

With many businesses in the technology sector already planning steps towards more sustainable practices, the new EU mandate only serves to function as a motivation that will help move the needle in terms of impact sooner. Not only does the regulation help collective sustainability goals, but the move towards having more visibility of materials can also enable a culture of recycling and reusing. What is certain is that businesses that act sooner will have the most to gain by having the space to plan mindfully. Time to act now.

Want more background? Read Lars Rensing’s earlier article on DPPs

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The AI Act is one of the world’s first AI frameworks. Politicians worldwide are looking to grasp the opportunities offered by the explosion of generative AI while allaying fears about bias, privacy, and a potential existential threat to humanity itself.

EU lawmakers gave the AI Act final approval on Wednesday, with 523 votes in favour, 46 against, and 49 not cast.

“Europe is now a global standard-setter in AI,” Thierry Breton, the European Commissioner for the Internal Market, wrote on X.

Democracy: 1⃣ | Lobby: 0⃣

I welcome the overwhelming support from European Parliament for our #AIAct —the world’s 1st comprehensive, binding rules for trusted AI.

Europe is NOW a global standard-setter in AI.

We are regulating as little as possible — but as much as needed! pic.twitter.com/t4ahAwkaSn

— Thierry Breton (@ThierryBreton) March 13, 2024

What is the AI Act?

The AI Act aims to regulate AI based on its capacity to harm people, with higher-risk applications facing stricter regulations.

This includes banning any applications deemed to pose a “clear risk to fundamental rights.”

Strict regulations will be applied to AI systems used in critical infrastructure, education, healthcare, law enforcement, or democracy, which are deemed “high risk.”

Lawmakers said most services will likely fall into the “low risk” category, facing the lightest regulation. These include use cases such as content recommendation systems or spam filters.

The AI Act has been in development since 2020. Early drafts focused on limited AI systems, such as those automating small tasks like document scanning.

However, the release of ChatGPT in 2022 and the sudden boom in AI development forced the European Parliament and EU lawmakers to overhaul and accelerate regulatory plans.

The new laws mean that companies developing genAI models, such as OpenAI and Google, will need to provide detailed summaries of data taken from the Internet and used to train their systems.

Any deepfake images, audio, or video generated by AI must be suitably labelled as artificially manipulated.

However, the EU intends to support innovation and the adoption and development of AI by SMEs.

The AI Act mandates the establishment of regulatory sandboxes and real-world testing at the national level. These will be accessible to SMEs and start-ups so they can develop and train innovative AI before its release on the market.

Dragos Tudorache, Civil Liberties Committee co-rapporteur, said: “The EU has delivered. We have linked the concept of artificial intelligence to the fundamental values that form the basis of our societies.”

“However, much work lies ahead that goes beyond the AI Act itself. AI will push us to rethink the social contract at the heart of our democracies, our education models, our labour markets, and the way we conduct warfare. The AI Act is a starting point for a new model of governance built around technology. We must now focus on putting this law into practice.”

Other countries have also implemented AI regulations. In 2022, China passed three measures on the national, regional, and local levels. It also enforced restrictions on deepfakes last year.

US President Joe Biden signed an executive order forcing AI developers to share information with the US government. The UK has several AI laws in place but no overarching framework.

UK, US, EU, and China sign Bletchley declaration warning of AI danger

Reaction

Industry experts generally welcomed the European Parliament’s approval of the AI Act, acknowledging that regulation can help various sectors adopt AI while also protecting citizens.

However, they cautioned that regulators must maintain a delicate balance between the need for regulation and the potential for innovation.

Greg Hanson, GVP and head of sales EMEA North at Informatica said: “Final approval of the EU’s AI Act will resonate far beyond the region’s borders. What’s clear is that large, multi-national organisations will not be able to afford to do AI regulation on a siloed project-by-project, country-by-country basis. It is too complex.”

“Instead, organisations will need to consider how AI regulation translates into policy and put solid foundations in place that can be easily adapted for individual regions. For example, regulators across countries are showing an appetite for transparency.”

Curtis Wilson, staff data scientist at the Synopsys Software Integrity Group, said that regulatory frameworks such as the AI Act are “an essential component in building trust in AI.”

“The greatest problem facing AI developers is not regulation, but a lack of trust in AI. For an AI system to reach its full potential, it needs to be trusted by the people who use it,” he added.

“The Act itself is mostly concerned with regulating high-risk systems and foundational models. However, many of the requirements already align with data science best practices, such as risk management, testing procedures, and thorough documentation. Ensuring that all AI developers adhere to these standards is to everyone’s benefit.”

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Speaking on a podcast published this week, Khan added that the deepfake almost caused “serious disorder” when it was shared across social media.

Hundreds of thousands of pro-Palestinian protesters gathered in London on Armistice Day, and 145 arrests were made.

The London Mayor’s deepfake did not constitute a criminal offence, according to the Metropolitan police. This decision highlights how the law is perhaps outdated by some of the new threats posed by AI.

Khan told the podcast that the man who created the audio “got away with it” and that existing laws to govern deepfakes are not “fit for purpose.”

“What was being said was a red rag to a bull for the far right and others,” Sadiq Khan told the BBC podcast ‘Why do you hate me?’

The mayor argued that organisations like the Electoral Commission need more powers to deal with misinformation. He later tweeted: “We can’t overstate the grave danger this new technology poses to our politics and democratic freedoms.”

This deepfake video, shared by the far-right on social media, was a clear attempt to sow hatred and division ahead of Remembrance Day.

We can’t overstate the grave danger this new technology poses to our politics and democratic freedoms. https://t.co/9TiL30Gfmc

— Sadiq Khan (@SadiqKhan) February 14, 2024

The BBC says it traced the recording back to TikTok and what appears to be the originator of the clip — a profile called HJB News.

“I think parliament needs to wake up and understand that if they don’t take action, it’ll provide opportunities for mischief makers to be bolder,” Khan added.

“I think it’s really important that we understand that the current laws we have around copyright, IP, criminal law aren’t fit for purpose.”

In the same week that the clip went viral, the UK’s National Cyber Security Centre warned that deepfake campaigns were likely to become more advanced in the run-up to the next general election, which is due to take place later this year.

Sadiq Khan will also be defending his position later in the year as London mayoral elections take place in May.

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The campaign introduces an online hub, offering advice to the British public. Over the coming weeks, it aims to reach 95% of UK adults through various media, including billboards, radio, TV, and social media.

The Home Office is working with various stakeholders on the campaign, including financial institutions like Barclays, Halifax, HSBC, and Santander. In addition, digital tech giants like Google, Meta, TikTok, and X (Twitter) are also named as stakeholders.

Leading counter-fraud experts support the initiative, which aims to unify efforts against the increasing issue in the UK.

In the region, fraud currently accounts for approximately 40% of all crimes, translating to an estimated 3.2 million yearly offences.

UK Home Secretary James Cleverly called the campaign a pivotal addition to the government’s robust Fraud Strategy, emphasising its potential to “deliver for the British people.”

“This new campaign is a powerful tool to add to our arsenal, which already includes a world-first agreement from tech firms to prevent online fraud and the rollout of a National Fraud Squad that has 400 expert investigators.”

Fraud costs the taxpayer an estimated £6.8 billion per year.

Our new campaign takes the fight to criminals, giving you the skills to spot fraud and protect you from its devastating impacts.

— Home Office (@ukhomeoffice) February 12, 2024

UK Security Minister Tom Tugendhat added that the campaign would equip the public with tips to prevent fraudsters from stealing their hard-earned cash.

However, concerns were raised last month by several bank executives about the potential overlap with the industry-funded “Take Five to Stop Fraud” campaign.

The government’s announcement seems to address that, saying they will update pre-existing advice they have shared in public places and replace it with the ‘Stop! Think Fraud’ messaging and branding.

“This one clear set of advice will remove confusion, which was a risk with so many different campaigns previously existing in the same space,” it said in a statement issued today.

The initiative is part of the UK government’s broader Fraud Strategy, which includes ambitious goals like reducing the crime by 10% on 2019 levels by December 2024.

The campaign has faced criticism, however. Shadow Attorney General Emily Thornberry pointed to a significant increase under the current government, citing this initiative as “too little, too late”.

“This new campaign ignores the £158 billion lost to fraud each year by UK businesses and does not even mention the two biggest components of those losses — procurement and payroll fraud.”

Rocio Concha, director of policy and advocacy at consumer group Which?, emphasised the need for broader measures to prevent scammers from reaching potential victims.

“The onus shouldn’t fall just on consumers to protect themselves. The government should urgently plug the gaps in fraud prevention, particularly in the telecoms, online advertising and domain sectors”.

This announcement comes as the UK prepares for the first-ever Global Fraud Summit next month and a week after an announcement to invest £100m into AI regulation and research.

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EU negotiators have agreed a new set of rules that will also require platforms to remove illegal products and services as well as placing restrictions on product recommendations and targeted advertising.

Late last week, the European Parliament and the European Council (the body that represents member states) released a statement announcing that they had reached a provisional political agreement on the Digital Services Act (DSA) which it hoped would set the standards for ” a safer and more open digital space for users and a level playing field for companies.”

Under the DSA, the European Commission and member states will have access to the algorithms of very large online platforms – which it defines as “platforms that have more than 45 million users”.

Other requirements include the clear and swift removal of illegal online content, products and services and stronger safeguards to ensure notices are processed in a non-arbitrary and non-discriminatory manner and with respect for fundamental rights, including the freedom of expression and data protection.

Penalties for infringement mean that online platforms and search engines can be fined up to 6% of their global turnover. In the case of very large online platforms the EU Commission will have exclusive power to demand compliance.

Targeted ad and search restrictions

Platforms must inform users about how content is recommended to them and to enable them to choose at least one option not based on profiling.

Targeted advertising is banned when it comes to sensitive data (based on sexual orientation, religion, ethnicity for instance); Targeting of advertising to minors meanwhile, will be banned outright.

Platforms will also be prevented from ‘nudging’ people to use their service by giving them more prominence in search results, for instance, while cancelling a subscription service should be as easy as signing up for it.

Larger online platforms will be obliged, under the DSA to assess and mitigate systemic risks and will be subject to annual independent audits.

The EC will also have the power to require large platforms to limit urgent threats in time of public security or health crises.

The EC said that it plans to give SMEs more time to apply the new rules and will monitor the potential economic effects closely.

Once the draft text is finalised, the European Parliament and the Council will formally approve the act, which will come into force 20 days after its publication in the official journal. Rules will start to apply after 15 months.

Parliamentary rapporteur Christel Schaldemose said that the act would “set new global standards” by giving citizens “better control over how their data is used” by platforms and big tech companies.

“For the European Parliament, additional obligations on algorithmic transparency and disinformation are important achievements,” she said, adding that the rules “guarantee more choice for users and new obligations for platforms on targeted ads, including bans to target minors and restricting data harvesting for profiling.”

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