Europe’s Digital Services Act includes ‘recommender’ rules


Europe’s Digital Services Act (DSA) crept one step closer to being implemented this weekend, after the European Parliament and European Council (the latter of which represents the EU’s member states) reached ‘political agreement’ on the proposed legislation.

Although there are some more steps to go before those EU countries can start implementing it – a process which itself can take a long time and have some unexpected legislative turns – it’s a good time to think about what the DSA will mean for the big music streaming services.

We stress ‘big’ because that’s a key part of the DSA: defining ‘very large online platforms’ (VLOPs) as any service with more than 45 million monthly active users (MAUs) in the European Union.

That certainly includes Spotify, which ended 2021 with a third of its 406 million MAUs in Europe – that’s nearly 134 million, so even though Spotify’s definition of Europe will be larger than the 27 EU member states, it will still be comfortably over 45 million.

Apple Music and Amazon Music may fall below this bar as specific services, but YouTube, TikTok and all the other big social media platforms will be included.

Watch the DSA’s final text closely for its section on ‘recommender systems’. The announcement of the political agreement said that “transparency requirements for the parameters of recommender systems have been introduced in order to improve information for users and any choices they make”, adding that “VLOPs and VLOSEs [very large online search engines] will have to offer users a system for recommending content that is not based on their profiling.”

What might the ‘transparency requirements’ be for Spotify’s recommendation algorithms? What would a version of Spotify with those recommendations stripped out look like? And what would it mean for the competitive environment if that company faces stricter rules than rival services who may be smaller in user numbers, but whose parent companies are much bigger and richer?

This isn’t just about Spotify, of course. The part about online services being “prohibited from presenting targeted advertising based on the use of minors’ personal data” has implications for many companies in the social media and (ad-supported) streaming spaces, while the DSA’s requirements around illegal content and misinformation could also be a big deal.

Useful context for all this comes with a report published by research and campaigning group Corporate Europe Observatory about some of the tech companies’ lobbying around the DSA and its sister legislation the Digital Markets Act (DMA).

It identifies a sharp increase in lobbying budgets for Apple, Google, Facebook, Microsoft and Amazon, but – based on documents published by the EC and Swedish government in response to freedom of information requests – it also explains what Spotify lobbied politicians about in the DSA.

In one suggestion to the Swedish government, for example, it claimed that “a broad ban on tailored advertising to minors could badly affect the development of free streaming services, which are very popular with young people of different ages”.

Spotify also asked for “flexibility in how the DSA’s obligations on recommender systems are to be implemented” and warned about “transparency requirements around recommender systems that are not technically feasible”.

The company will, we’re sure, have plenty more opinions to share – as will all the big tech firms – as the EU member states begin implementing the legislation in the months ahead.

Written by: Stuart Dredge