DSA

ChatGPT Is Now Regulated Like Google as a Search Engine in the EU

ChatGPT With Ad. © OpenAI
ChatGPT With Ad. © OpenAI

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The European Commission has just placed three more services under the strictest tier of the Digital Services Act (DSA). ChatGPT will be treated as a Very Large Online Search Engine (VLOSE), while Reddit and Roblox are now designated Very Large Online Platforms (VLOPs). All three services have reported that they reach at least 45 million average monthly users in the EU, the threshold at which the Commission takes over direct oversight.

That brings the number of designated very large platforms and search engines to 28. The most consequential part is how ChatGPT was classified. The Commission argues that the AI system interacts with and responds to user prompts and queries, including by searching the web, which makes it a hybrid service that qualifies as an online search engine under the DSA. Reddit is treated as a discussion-based platform built around topic-based communities, and Roblox as an immersive gaming and creation platform where users publish games and play games built by others. Because both allow the public dissemination of third-party content, they fall under the DSA definition of an online platform.

Four Months to Meet the Additional Obligations

Once notified, the services have four months, until the end of December, to comply with the additional obligations for VLOPs and VLOSEs. At the core sits an annual assessment of the systemic risks stemming from the service itself and from its algorithmic systems: the spread of illegal content, negative effects on minors, consequences for users’ physical and mental wellbeing, and risks to fundamental rights, electoral processes and public security. Each assessment has to be followed by concrete mitigation measures, which independent auditors then review.

On top of that come operational requirements that reach deep into the products themselves: a publicly accessible advertising repository, data access for vetted researchers, transparency reports twice a year, notice-and-action mechanisms for illegal content along with complaint procedures, a crisis response mechanism, and, for platforms running recommender systems, at least one option that is not based on profiling. Advertising based on profiling with minors’ data is prohibited. The general DSA duties for online platforms and search engines already applied to all three services before this step.

The designation also gives the Commission investigatory powers to assess how the services and any connected systems work. Oversight is shared with the national Digital Services Coordinators: Coimisiún na Meán for ChatGPT and Reddit, and the Authority for Consumers and Markets (ACM) for Roblox, since the services are established in Ireland and the Netherlands respectively. How seriously the Commission treats enforcement became visible in its recent proceedings against major porn platforms.

What This Means for the Business Models

For all three companies, the immediate effect is a recurring cost. VLOPs and VLOSEs help finance their own supervision through an annual fee tied to worldwide net income and capped at 0.05 percent. Compliance teams, external audits and risk reports come on top. Breaches can trigger fines of up to six percent of global annual turnover.

The sharper questions concern each company’s core business. Roblox earns money from a user base that consists to a large extent of children and teenagers, and it has already tied access to chat features to facial age estimation. Under the DSA, that practice becomes reviewable in two directions at once, since the Commission will look at how well minors are protected and at whether the means used to protect them are proportionate. Reddit runs on advertising and on data licensing deals with AI companies, which puts the ad repository and the recommender system rules directly into its ranking and ad business. And OpenAI is currently building a second revenue stream alongside subscriptions by testing advertising in ChatGPT, a business that now falls under the DSA transparency and profiling rules from the very start.

For OpenAI, though, the biggest structural shift lies in the classification itself. An AI assistant is being regulated as a search engine for the first time, with everything that follows from it: traceable answer systems, research data access, and reporting channels for problematic content. That makes the decision a precedent for the entire market of AI chatbots, because it sets the reach at which a model provider in Europe is regulated like an infrastructure service.

“These new designations mean that ChatGPT, Reddit and Roblox will now be subject to a higher level of scrutiny and accountability in the European Union, commensurate with their significant impact on our citizens and society,” said Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy. “We continue to monitor the digital landscape closely and will not hesitate to designate any platform that meets the threshold for enhanced supervision under the Digital Services Act.”

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