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The EU’s New Rules on Personalised Social Media Feeds, Explained

The Digital Services Act could impact how fashion brands and marketers reach their online audiences, particularly if they depend on algorithmic recommendations for visibility and engagement.
The latest regulations to come into force under the EU’s Digital Services Act mean platforms like TikTok and Instagram must give European users the option for a feed that doesn’t use their personal data to recommend content.
The latest regulations to come into force under the EU’s Digital Services Act mean platforms like TikTok and Instagram must give European users the option for a feed that doesn’t use their personal data to recommend content. (Getty Images)

New changes are hitting social platforms in the EU, with possible implications for any brands that rely on them to connect with shoppers — which is basically everyone.

On August 25, regulations came into force that require large online platforms including Facebook, Instagram, TikTok and Snapchat to give European users at least one option for a content feed that doesn’t use their personal data for customisation. A user who chooses that alternative could still get recommended content, such as what’s popular in their country, but using their online behaviour to determine what to show them would be off limits.

The control still rests with users, and many may want a feed algorithmically tailored to the preferences they’ve shown. Their choices could vary by platform, too: The same user might want TikTok’s activity-based recommendations but not Instagram’s. But others may opt out of allowing social networks to use their data altogether due to privacy concerns.

The change could impact how brands and marketers get in front of new audiences and stay in contact with established ones, particularly if they depend on algorithmic recommendations for their visibility and engagement. Here’s what fashion businesses should know.

What is the Digital Services Act, and how does it affect TikTok, Instagram and others?

The new guidelines are part of the EU’s far-reaching Digital Services Act, which aims to regulate the way internet companies operating in the EU handle data and mitigate systemic risks. It began taking effect in a tiered system last year. The latest rules apply to what it calls large online platforms, meaning those with at least 45 million users. The category includes 19 companies, such as search giant Google, marketplaces Amazon and AliExpress, and Zalando, Europe’s largest online fashion retailer, which filed a suit contesting the designation. (Zalando declined to comment.)

Under the DSA, large online platforms have three types of obligations, according to Benjamin Beck, a senior associate in the Frankfurt office of law firm Mayer Brown. One is transparency, meaning they need to inform users about how they recommend content. Another is due diligence, where they need to perform risk assessments on their algorithms and document potential issues. The last is accountability, which entails providing authorities with all necessary data and information on their algorithms to ensure they’re in compliance.

Part of these obligations is the stipulation that users have the ability to opt out of profiling based on analysing their personal data, such as browsing history, as described in the EU’s General Data Protection Regulation (GDPR).

Can platforms just bury the opt-out option where users won’t find it?

In theory, platforms could give users the choice to turn off a custom, data-based algorithm but not make the option very easy to find. Beck said the rules that pertain specifically to recommendation systems aren’t clear about how users must be informed.

“That being said, when you talk about the list of companies that qualify [as very large online platforms], you don’t have that many,” added Livia Crepaldi Wolf, who is also in Mayer Brown’s Frankfurt office and part of its cybersecurity and data-privacy practice. “You have a lot of scrutiny in that sense. They are in the spotlight.”

She and Beck said there is incentive for the platforms not to be tricky and to present the options clearly to users. Under the DSA, companies not in compliance can be fined up to 6 percent of their annual turnover.

What do these changes mean for brands?

Depending on how the DSA is enforced and how users respond, the landmark legislation could result in a significant number of people in the EU abandoning social feeds based on their personal data, with various impacts to brands.

Bruno Gavino, chief executive of Codedesign, a digital strategy firm based in Portugal, said in an email that the company has been following the situation closely. Brands that previously enjoyed high visibility due to recommendation algorithms could see their reach decline. It could also make precisely targeting ads at the right shoppers difficult.

To compensate, brands could ultimately choose to adjust their strategies, diversifying beyond the big platforms and putting more emphasis on direct channels such as email, SMS and their own apps. They could also lean more heavily on influencers, who will still turn up in the feeds of their followers. They might rethink their content, too.

“Brands will need to produce more engaging and genuine content that naturally draws users in, rather than relying on algorithms to boost their posts,” Gavino said.

On the flip side, companies with dedicated followings could like user feeds where they’re not competing for attention with others, especially if they don’t have large ad budgets to pay for priority placement. The situation could also benefit big brands that already have name recognition and large followings.

How worried are brands about the DSA changes?

Despite what could be potentially significant changes to the content social-media users see in the EU, Gavino said Codedesign’s fashion clients are mostly unaware of the changes, particularly if they don’t have dedicated digital marketing teams.

Those who are aware have largely taken a wait-and-see approach to determine what the real impacts are before they overhaul their strategies. After all, there was a great deal of concern when GDPR took effect in 2018 but it wound up not having a major impact for many brands.

The DSA could be different because it could shape how brands appear in social media feeds, which have become some of fashion’s most important marketing channels. But that will all hinge on whether or not users decide to share their personal data for personalised recommendations.

Further Reading

As digital marketing becomes less effective and more costly, brands will embrace creative campaigns and channels such as retail media networks and the metaverse to achieve greater returns on investment and deepen community-led customer engagement.

Higher-end fashion labels have become more prolific on the short-form video app in 2023. BoF unpacks how brands are growing buzz on TikTok.

About the author
Marc Bain
Marc Bain

Marc Bain is Technology Correspondent at The Business of Fashion. He is based in New York and drives BoF’s coverage of technology and innovation, from start-ups to Big Tech.

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