The decision to go monochrome was probably a smart one, considering the candy-colored alternatives that seem to want to dazzle and comfort you.
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Ultra-fast fashion ecommerce giant Shein will be subject to an additional layer of governance rules targeted at very large online platforms (VLOPs) under the European Union’s Digital Services Act (DSA), the Commission announced Friday.
Shein had reported passing an average of 45 million monthly users in the region — which is the threshold for the EU to designate VLOPs under the DSA.
The designation is important as it means the Singapore-headquartered marketplace will soon have to comply with the strictest level of online governance — requiring it to take steps to identify and mitigate systemic risks, such as related to the sale of counterfeit or illegal goods or other types of content which could pose harms to consumers’ well-being.
Other DSA obligations for VLOPs include a requirement to publish an ads library, as well as providing access to platform data to external researchers studying systemic risk.
Shein joins roughly two dozen platforms already designated as VLOPs or VLOSE (very large online search engines) by the EU. Other VLOP marketplaces include the likes of AliExpress, which is already under investigation by the Commission for suspected breaches of the DSA; Amazon, which has challenged its designation (but remains subject to the rules in the meanwhile); Booking.com; and Zalando.
The DSA’s general obligations already applied to Shein, as one of likely thousands of online services in scope of the general rules. But being named a VLOP amps up the regulatory risk for the fast-fashion giant. The EU will expect Shein’s first risk assessment report to be submitted in four months’ time.
Penalties for failing to comply with the DSA, meanwhile, can reach up to 6% of global annual turnover. The maximum fine does not increase for VLOPs but with more obligations piled on them the level of regulatory risk they’re subject to certainly rises.
So far no platforms or services have been found to have breached the DSA so it remains to be seen how penalties might be meted out in practice. But it’s logical that larger platforms could also face stiffer fines for any compliance failures.
While fashion was Shein’s initial product focus the ecommerce giant has been rapidly expanding its inventory into a far broader marketplace, covering a growing range of lifestyle and homeware categories (such as cosmetics, supplies for schoolkids and products for pets).
Its tactic of offering a vast range of fashion-focused goods, typically at bargain basement prices, means the marketplace is especially popular with young users. However it’s a dynamic that could amp up the regulatory risk for Shein as the Commission has said its priorities in enforcing the DSA include honing in on risks related to child protection and marketplace safety. Cheap goods may also not have the highest safety standards.
“The Commission services will carefully monitor the application of the DSA rules and obligations by the platform, especially concerning measures to guarantee consumer protection and address the dissemination of illegal products,” the EU wrote in a press release accompanying Shein’s designation. It added that it is “ready to engage closely with Shein to ensure these are properly addressed”.
Prior to Shein being designated a VLOP oversight of its compliance with the DSA fell to the Irish Digital Services Coordinator (IDSC), as its EMEA HQ is located in Dublin. But the Commission enforces of the subset of DSA rules that apply to VLOPs so it will be taking up the oversight baton on the marketplace — alongside the IDSC’s ongoing supervision of Shein’s compliance with the rulebook’s general obligations.
Meta’s tracking ads business could be facing further legal blows in the European Union: An influential advisor to the bloc’s top court affirmed Thursday that the region’s privacy laws limits on how long people’s data can be used for targeted advertising.
In the non-legally binding opinion, Advocate General Athanasios Rantos said use of personal data for advertising must be limited.
This is important because Meta’s tracking ads business relies upon ingesting vast amounts of personal data to build profiles of individuals to target them with advertising messages. Any limits on how it can use personal data could limit its ability to profit off of people’s attention.
A final ruling on the point remains pending — typically these arrive three to six months after an AG opinion — but the Court of Justice of the EU (CJEU) often takes a similar view to its advisors.
The CJEU’s role, meanwhile, is to clarify the application of EU law so its rulings are keenly watched as they steer how lower courts and regulators uphold the law.
Per AG Rantos, data retention for ads must take account of the principle of proportionality, a general principle of EU law that also applies to the bloc’s privacy framework, the General Data Protection Regulation (GDPR) — such as when determining a lawful basis for processing. A key requirement of the regulation is to have a legal basis for handling people’s information.
In a press release the CJEU writes with emphasis: “Rantos proposes that the Court should rule that the GDPR precludes the processing of personal data for the purposes of targeted advertising without restriction as to time. The national court must assess, based inter alia on the principle of proportionality, the extent to which the data retention period and the amount of data processed are justified having regard to the legitimate aim of processing those data for the purposes of personalised advertising.”
The CJEU is considering two legal questions referred to it by a court in Austria. These relate to a privacy challenge, dating back to 2020, brought against Meta’s adtech business by Max Schrems, a lawyer and privacy campaigner. Schrems is well known in Europe as he’s already racked up multiple privacy wins against Meta — which have led to penalties that have cost the tech giant well over a billion dollars in fines since the GDPR came into force.
An internal memo by Meta engineers, obtained by Motherboard/Vice back in 2022, painted a picture of a company unable to apply policies to limit its use of people’s data after ingestion by its ads systems as it had “built a system with open borders”, as the document put it. Although Meta disputed the characterization, claiming at the time the document “does not describe our extensive processes and controls to comply with privacy regulations”.
But it’s clear Meta’s core business model relies on its ability to track and profile web users to operate its microtargeted advertising business. So any hard legal limits on its ability to process and retain people’s data could have big implications for its profitability. To wit: Last year, Meta suggested around 10% of its worldwide ad revenue is generated in the EU.
In recent months, European Union lawmakers and regulators have also notably been dialling up pressure on the adtech giant to ditch its addiction to surveillance advertising — with the Commission explicitly name-checking the existence of alternative ad models, such as contextual advertising, when it opened an investigation into Meta’s binary “consent or pay” user offer last month, under the market power-focused Digital Markets Act.
A key GDPR steering body, meanwhile, also put out guidance on “consent or pay” earlier this month — stressing that larger ad platforms like Meta must give users a “real choice” about decisions affecting their privacy.
In today’s opinion, AG Rantos has also opined on a second point that’s been referred to the court: Namely whether making “manifestly” public certain personal information — in this case, info related to Schrems’ sexual orientation — gives Meta carte blanche to retrospectively claim it can use the sensitive data for ad targeting.
Schrems had complained he received ads on Facebook targeting his sexuality. He subsequently discussed his sexuality publicly but had argued the GDPR principle of purpose limitation must be applied in parallel, referencing a core plank of the regulation that limits further processing of personal data (i.e. without a new valid legal basis such as obtaining the user’s consent).
AG Rantos’ opinion appears to align with Schrems’. Discussing this point, the press release notes (again with emphasis): “while data concerning sexual orientation fall into the category of data that enjoy particular protection and the processing of which is prohibited, that prohibition does not apply when the data are manifestly made public by the data subject. Nevertheless, this position does not in itself permit the processing of those data for the purposes of personalised advertising.”
In an initial reaction to the AG’s views on both legal questions, Schrems, who is founder and chairman of the European privacy rights nonprofit, noyb, welcomed the opinion, via his lawyer for the case against Meta, Katharina Raabe-Stuppnig.
“At the moment, the online advertising industry simply stores everything forever. The law is clear that the processing must stop after a few days or weeks. For Meta, this would mean that a large part of the information they have collected over the last decade would become taboo for advertising,” she wrote in a statement highlighting the importance of limits on data retention for ads.
“Meta has basically been building a huge data pool on users for 20 years now, and it is growing every day. EU law, however, requires ‘data minimisation’. If the Court follows the opinion, only a small part of this pool will be allowed to be used for advertising — even if have consented to ads,” she added.
On the issue of further use of sensitive data that’s been made public, she said: “This issue is highly relevant for anyone who makes a public statement. Do you retroactively waive your right to privacy for even totally unrelated information, or can only the statement itself be used for the purpose intended by the speaker? If the Court interprets this as a general ‘waiver’ of your rights, it would chill any online speech on Instagram, Facebook or Twitter.”
Reached for its own reaction to the AG opinion, Meta spokesman Matthew Pollard told TechCrunch it would await the court ruling.
The company also claims to have “overhauled privacy” since 2019, suggesting it’s spent €5BN+ on EU-related privacy compliance issues and expanding user controls. “Since 2019, we have overhauled privacy at Meta and invested over five billion Euros to embed privacy at the heart of our products,” wrote Meta in an emailed statement. “Everyone using Facebook has access to a wide range of settings and tools that allow people to manage how we use their information.”
On sensitive data, Pollard highlighted another claim by Meta that it “does not use sensitive data that users provide us to personalise ads”, as the statement puts it.
“We also prohibit advertisers from sharing sensitive information in our terms and we filter out any potentially sensitive information that we’re able to detect,” Meta also wrote, adding: “Further, we’ve taken steps to remove any advertiser targeting options based on topics perceived by users to be sensitive.”
In April 2021, Meta announced a policy change in this area — saying it would no longer allow advertisers to target users with ads based on sensitive categories such as their sexual orientation, race, political beliefs or religion. However, in May 2022, an investigation by the data journalism nonprofit, The Markup, found it was easy for advertisers to circumvent Meta’s ban by using “obvious proxies”.
A CJEU ruling back in August 2022 also looks very relevant here as the court affirmed then that sensitive inferences should be treated as sensitive personal data under the GDPR. Or, put another way, using a proxy for sexual orientation to target ads requires obtaining the same stringent standard of “explicit consent” as directly targeting ads at a person’s sexual orientation would need in order to be lawful processing in the EU.
The Senate passed a bill, included with the foreign aid package, that will ban TikTok if its owner, ByteDance, doesn’t sell it within a year. Senators passed the bill 79-18 Tuesday after the House passed it with overwhelming majority over the weekend.
President Joe Biden will have to sign the bill to make it law, and as per a statement released by the White House, he intends to do so on Wednesday.
Notably, in March, the House passed a similar standalone bill to ban TikTok or force its sale with a six-month time limit. However, the Senate never took that bill up. This time, as the bill was tied with critical foreign aid to Ukraine, Israel, and Taiwan, the Senate had to make a decision.
TikTok didn’t immediately release a statement. However, Michael Beckerman, the company’s head of public policy for the Americas, said that the company plans to challenge the move in courts, according to Bloomberg.
“This is an unprecedented deal worked out between the Republican Speaker and President Biden. The stage that the bill is signed, we will move to the courts for a legal challenge,” he said in a memo to TikTok’s US staff earlier this week.
The bill gives Bytedance nine months to force a sale with a 90-day extension — so effectively a year to complete the deal.
Last week, when the House passed the bill, TikTok said it was “unfortunate” that the House was using the cover of important foreign and humanitarian assistance to jam through a ban bill that restricts the “free speech rights of 170 million Americans.”
While TikTok operates out of Singapore, the U.S. has been concerned about the data of its citizens, given the Chinese ownership of the social media platform. TikTok has continually tried to assure the government that it doesn’t give out U.S. user data to China with different campaigns.
Generative AI models are increasingly being brought to healthcare settings — in some cases prematurely, perhaps. Early adopters believe that they’ll unlock increased efficiency while revealing insights that’d otherwise be missed. Critics, meanwhile, point out that these models have flaws and biases that could contribute to worse health outcomes.
But is there a quantitative way to know how helpful, or harmful, a model might be when tasked with things like summarizing patient records or answering health-related questions?
Hugging Face, the AI startup, proposes a solution in a newly released benchmark test called Open Medical-LLM. Created in partnership with researchers at the nonprofit Open Life Science AI and the University of Edinburgh’s Natural Language Processing Group, Open Medical-LLM aims to standardize evaluating the performance of generative AI models on a range of medical-related tasks.
Open Medical-LLM isn’t a from-scratch benchmark, per se, but rather a stitching-together of existing test sets — MedQA, PubMedQA, MedMCQA and so on — designed to probe models for general medical knowledge and related fields, such as anatomy, pharmacology, genetics and clinical practice. The benchmark contains multiple choice and open-ended questions that require medical reasoning and understanding, drawing from material including U.S. and Indian medical licensing exams and college biology test question banks.
“[Open Medical-LLM] enables researchers and practitioners to identify the strengths and weaknesses of different approaches, drive further advancements in the field and ultimately contribute to better patient care and outcome,” Hugging Face wrote in a blog post.
Image Credits: Hugging Face
Hugging Face is positioning the benchmark as a “robust assessment” of healthcare-bound generative AI models. But some medical experts on social media cautioned against putting too much stock into Open Medical-LLM, lest it lead to ill-informed deployments.
On X, Liam McCoy, a resident physician in neurology at the University of Alberta, pointed out that the gap between the “contrived environment” of medical question-answering and actual clinical practice can be quite large.
Hugging Face research scientist Clémentine Fourrier, who co-authored the blog post, agreed.
“These leaderboards should only be used as a first approximation of which [generative AI model] to explore for a given use case, but then a deeper phase of testing is always needed to examine the model’s limits and relevance in real conditions,” Fourrier replied on X. “Medical [models] should absolutely not be used on their own by patients, but instead should be trained to become support tools for MDs.”
It brings to mind Google’s experience when it tried to bring an AI screening tool for diabetic retinopathy to healthcare systems in Thailand.
Google created a deep learning system that scanned images of the eye, looking for evidence of retinopathy, a leading cause of vision loss. But despite high theoretical accuracy, the tool proved impractical in real-world testing, frustrating both patients and nurses with inconsistent results and a general lack of harmony with on-the-ground practices.
It’s telling that of the 139 AI-related medical devices the U.S. Food and Drug Administration has approved to date, none use generative AI. It’s exceptionally difficult to test how a generative AI tool’s performance in the lab will translate to hospitals and outpatient clinics, and, perhaps more importantly, how the outcomes might trend over time.
That’s not to suggest Open Medical-LLM isn’t useful or informative. The results leaderboard, if nothing else, serves as a reminder of just how poorly models answer basic health questions. But Open Medical-LLM, and no other benchmark for that matter, is a substitute for carefully thought-out real-world testing.
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