The European Parliament and the 27 EU member states have reached a landmark deal to compel platforms such as Facebook, Twitter and Google to regulate harmful online content such as hate speech and disinformation.
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European Commission President Ursula von der Leyen described it as an "historic" agreement that will have ramifications beyond Europe.
"Our new rules will protect users online, ensure freedom of expression and opportunities for businesses," she tweeted
"What is illegal offline will effectively be illegal online in the EU," von der Leyen added. "A strong signal for people, business & countries worldwide."
The Digital Services Act (DSA) represents the biggest shake-up in EU law in this area in some 20 years.
The DSA spells out the responsibilities for technology and internet companies. It touches on issues like hate speech, spreading disinformation, the sale of illegal and counterfeit goods and protecting fundamental rights.
It means companies must moderate their platforms for harmful content like Covid-19 disinformation and introduce protocols to block the spread of dangerous material during crises like the pandemic.
Companies must also increase transparency regarding interactions with users and simplify user agreements.
Furthermore, the DSA bans targeted advertising using sensitive personal data like sexual orientation or political and religious beliefs. Target advertising at minors is also prohibited.
The German Federal Minister of Justice Marco Buschmann said that "the Digital Services Act protects free speech online. Platforms are no longer allowed to delete contributions on a whim and will have to justify their decisions if requested."
He also noted the importance of curtailing the spread of illegal content. "Death threats, aggressive insults and calls for violence are not an expression of free speech, but an attack on free and open discourse," he said.
The DSA was also welcomed by the executive vice president of the International Auschwitz Comittee, Christoph Heubner, who called it "a clear sign of hope" for Holocaust survivors.
Heubner said that the principle of banning online that which is illegal offline would be a decisive step for the "fight against racist and anti-Semitic hate, as well as fascist war propaganda."
The DSA is part of a two-pillar package of legislation regulating technology giants and internet companies operating in the European Union.
Negotiators agreed the Digital Market Act (DMA) in March 2021. It focuses on market distortion risks and targets the biggest digital players - those platforms that act as so-called "gatekeepers" - to prevent them abusing their dominant market position.
The European Parliament and the EU member states must now adopt the DSA legislation, which is regarded as a formality, before a 15 month transitional period, after which it enters into force.
Australian Associated Press
