Social Media Giants Liable for Financial Scams Under New EU Law
By GIOVANNA FAGGIONATO AND ELIZA GKRITSI
The new rules set a dangerous precedent, big tech companies say.
BRUSSELS — Platforms including Meta and TikTok will be held liable for financial fraud for the first time under new rules agreed by EU lawmakers in the early hours of Thursday.
The Parliament and Council agreed on the package of rules after eight hours of negotiations to strengthen safeguards against payment fraud. The deal adds another layer of EU regulatory risk for U.S. tech giants, which have lobbied the White House to confront Brussels’ anti-monopoly and content moderation rules.
“This is a big win. A big, big step forward. We are coming from a reality where platforms are not liable under any law,” Morten Løkkegaard, the Danish Renew MEP who shepherded part of the package through Parliament, told POLITICO. “It is a historical moment.”
Social media has become rife with financial scams, and MEPs pushed hard to hold both Big Tech and banks liable during legislative negotiations. EU governments, meanwhile, believed banks should be held responsible if their safeguards aren’t strong enough.
As a compromise, lawmakers agreed that banks should reimburse victims if a scammer, impersonating the bank, swindles them out of their money, or if payments are processed without consent.
But social media companies will have to compensate banks if it’s clear that they failed to remove an online scam that had been reported.
Some MEPs had called for more amid concerns that EU consumer safeguards on social platforms have proven insufficient. “Especially, as AI and social-engineering fuel an unprecedented rise in scams,” said Lithuanian Greens lawmaker Virginijus Sinkevičius.
The new rules build on the EU’s Digital Services Act and the Digital Markets Act, which respectively limit the spread of illegal content and prevent large online platforms, such as Google, Amazon and Meta, from overextending their online empires.
Breaching the DSA and DMA can come with huge fines, triggering pushback from the tech sector and U.S. President Donald Trump, who has accused the EU of discriminating against American companies. U.S. Secretary of Commerce Howard Lutnick has threatened to keep 50 percent tariffs on European exports of steel and aluminum unless the EU loosens its digital rules.
Thursday’s deal triggered immediate criticism from the tech industry.
“This convoluted framework undermines simplification efforts and conflicts with the Digital Services Act’s ban on general monitoring — ignoring multiple studies warning it will be counterproductive,” said CCIA Europe Policy Manager Leonardo Veneziani, whose trade body represents Amazon, Google, Meta and Apple.
“Instead of protecting consumers, today’s outcome sets a dangerous precedent and shifts responsibility away from those best placed to prevent fraud,” he said.
