Social media giants including Meta and TikTok will face direct liability for financial scams under a new set of rules agreed to by European Union lawmakers early Thursday. After eight hours of negotiations, the European Parliament and Council struck a deal aimed at strengthening protections against payment fraud and expanding regulatory exposure for major U.S. technology firms.
Shift in Responsibility for Online Fraud
Lawmakers pushed for tighter accountability as scams on social platforms continued to rise across the bloc. According to POLITICO, negotiators framed the agreement as a historic moment, noting that platforms had previously carried little to no legal responsibility for fraudulent activity hosted on their services. Banks argued they should not bear sole responsibility, while legislators insisted on shared accountability across the digital ecosystem.
Compensation Rules for Banks and Tech Firms
Under the compromise, banks must reimburse victims if scammers impersonate financial institutions or if unauthorized payments are processed. Social media companies, however, will be required to compensate banks when they fail to remove reported scam content in a timely manner. Some lawmakers warned that existing consumer safeguards on platforms remain inadequate, especially as AI-driven schemes and social-engineering tactics surge across Europe.
Part of Broader EU Digital Crackdown
The new rules expand on the Digital Services Act and Digital Markets Act, which restrict the spread of illegal content and curb the dominance of the world’s largest tech platforms. Violations of these laws carry significant financial penalties, intensifying transatlantic tensions over digital regulation. The measures have previously drawn criticism from U.S. officials who accuse the EU of targeting American companies.
Tech Industry Pushback
Industry groups immediately raised concerns following Thursday’s deal. Representatives for major platforms said the framework conflicts with existing EU law, arguing that it imposes contradictory obligations and could ultimately reduce consumer protection. Trade associations representing companies such as Amazon, Google, Meta and Apple warned that the approach risks shifting responsibility away from entities best positioned to prevent fraud.
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