Europe's landmark tech legislation will pry open content algorithms and limit ads

European officials have come to an agreement on landmark legislation to police illegal and harmful content online that will also impose transparency requirements on content recommendation algorithms and limit the targeting of ads to minors.

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The long-awaited Digital Services Act proposal aims its toughest rules at illegal content and goods on Big Tech platforms like Meta, Google and Amazon, but the measure will also place requirements on internet providers, cloud hosting, app stores, domain name registrars and smaller social media and e-commerce companies.

The agreement on the DSA, which still requires all-but-inevitable approval from the bloc's authorities, comes just a month after a final accord on the Digital Markets Act, which would fundamentally remake the business practices of the largest tech companies. The EU is also preparing to take on artificial intelligence in coming months and years.

Together, they represent a sweeping European effort to regulate tech commerce, from distribution to consumer experiences, often aiming at powerful U.S. companies and setting a regulatory stage that will affect businesses around the world. Those large, mostly American, tech giants can face "sanctions of up to 6% of global turnover or even a ban on operating in the EU single market in case of repeated serious breaches," according to a summary from the European Commission. The full text of the legislation was not immediately available.

In addition to algorithmic transparency for content and product promotion and the ban on targeting kids with ads, the DSA would also impose "limits on the use of sensitive personal data for targeted advertising," reportedly including gender, race and religion. It would also force companies to put in place systems for flagging illegal goods and content and for faster removal.

"It gives practical effect to the principle that what is illegal offline, should be illegal online," said Ursula von der Leyen, the commission's president, in a statement.

In addition to illegal content, the DSA also aims at harmful content, such as viral "dangerous disinformation."

While the DSA springs from serious concern by world leaders about the spread of harm at digital scale, it's also prompted warnings that efforts to combat such dangers have sometimes resulted in platforms shutting down legal but controversial speech.