BRUSSELS – On Friday, the European Union announced that Meta and TikTok have failed to meet their transparency commitments, following an investigation that could lead to substantial financial penalties.

The investigation revealed that both tech giants contravened the Digital Services Act (DSA), the EU’s pioneering set of digital regulations. These rules are crafted to enhance online safety for users by simplifying the reporting of counterfeit or unsafe products and the identification of harmful or illegal content such as hate speech. Additionally, the act prohibits advertisements targeted at children.

Henna Virkunnen, the EU’s executive vice president for tech sovereignty, security, and democracy, emphasized the importance of accountability in a post on X. She stated, “Platforms must be accountable to their users and society under EU law. Trust is vital for our democracies, which means empowering users, respecting their rights, and allowing for system scrutiny. The DSA enforces this as an obligation, not an option.”

In 2024, the 27-member EU initiated probes into Meta and TikTok. These investigations revealed that both companies restricted researchers’ access to data and that Meta’s platforms, Instagram and Facebook, did not facilitate easy reporting of illegal content or effective challenges to moderation decisions. The European Commission noted, “Researcher access to platform data is crucial for transparency under the DSA, enabling scrutiny of their potential impacts on physical and mental health.” The inquiry also highlighted that Facebook and Instagram used misleading interface designs, known as “dark patterns,” which complicated the process of reporting malicious content such as child exploitation or terrorism, rendering it confusing and ineffective.

Ben Walters, a spokesperson for Meta, expressed disagreement with the findings but affirmed the company’s willingness to negotiate compliance with the EU. “We have updated our content reporting options, appeals processes, and data access tools since the DSA was enacted, and we believe these meet EU requirements,” Walters stated. Meanwhile, TikTok responded by expressing the intent to review the findings, pointing out that the DSA’s transparency requirements conflict with the EU’s stringent privacy regulations, the General Data Protection Regulation. TikTok spokesperson Paolo Ganino commented, “If full compliance with both sets of obligations is not feasible, we call on regulators to clarify how these should be reconciled.”

Meta and TikTok can now file a response to the inquiry. Ultimately, the EU could fine the companies up to 6% of their annual profits — which could be in the billions.