EU/US social media regulation - lessons for ANZ

Australia and New Zealand should converge with global regulatory frameworks to manage social media content effectively.

Eduardo Fichmann · Factory Capital — Operating Partner7 June 2024Period: Q2 20248 min read

450M→

Total population of the European Union market

6%→

Maximum fine as a percentage of global turnover under EU DSA

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Abstract

This report highlights the need for small nations like Australia and New Zealand to converge with global precedent when regulating social media content, particularly the EU and the US. Both the EU and the US are currently implementing major social media content regulation initiatives that will set these precedents. Australia and New Zealand should avoid divergent approaches to regulation, adopting a fast follower strategy. Transparency in algorithmic processes and expanding codes of practice are crucial. Even if these recommendations are adopted, there will be significant technical and policy challenges in social media content regulation, and a complete solution is not realistic.

Key Takeaways

Australia and New Zealand should adopt a 'fast follower' strategy, aligning with EU and US regulatory precedents to avoid platform resistance.
The EU Digital Services Act (DSA) provides a scalable framework for removing illegal content and regulating algorithmic transparency.
Regulators require powers to examine social media algorithms to ensure they do not prioritize engagement over societal safety.

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Frequently Asked Questions

Adopting a 'fast follower' strategy prevents platform resistance and ensures local frameworks are compatible with global precedents. The EU Digital Services Act already governs a market of 450 million people, making it the primary scalable framework for illegal content removal and algorithmic transparency.

Regulatory risk is substantial, as the EU DSA allows for maximum fines of up to 6% of a company's total global turnover. Enforcement is already active, with formal investigations into major platforms like Meta initiated in mid-2024 regarding the protection of minors.

The strictest oversight is reserved for large platforms that exceed the threshold of 45 million monthly active users in the EU. These entities are required to provide regulators with the power to examine algorithms to ensure engagement metrics do not supersede societal safety.

Legislative momentum is shifting toward stricter age-based protections, such as the proposed 'digital majority' age of 15 in France and the EU. In the US, the Kids Online Safety Act has secured 69 co-sponsoring Senators, focusing specifically on preventing the promotion of self-harm and substance abuse.

Abstract

Key Takeaways

Frequently Asked Questions

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