EU makes social media platforms liable for financial scams
28 Nov 2025

The European Union (EU) has passed a new law that will hold social media platforms such as Meta and TikTok accountable for financial fraud.

The move is seen as a major step in the bloc's efforts to regulate Big Tech.

The legislation builds on existing laws like the Digital Services Act (DSA) and Digital Markets Act (DMA), which aim to curb illegal content and prevent tech giants from abusing their dominance on the internet.

Debate over responsibility for financial scams
Accountability discussion

A major part of the final negotiations was about who should be held responsible when these scams occur.

Some Members of the European Parliament (MEPs) argued that both Big Tech and banks are equally responsible as platforms host the scams while banks process the money.

However, European governments countered this argument, saying that banks should only be held accountable if their own safeguards fail.

Compromise reached on scam accountability
Compromise solution

The final compromise states that banks will have to reimburse victims when a scammer impersonates the bank or when a financial transaction is made without the customer's consent.

This new fraud-liability law comes at a time when social media users are increasingly being targeted by investment scams, impersonation schemes, and dubious ads.

Under this law, platforms will now have to compensate banks if a user is defrauded and it is evident that the company failed to remove a reported scam.

New law adds to regulatory pressure on tech giants
Regulatory impact

The new law adds another layer of regulatory pressure on tech companies that have been lobbying against the EU's aggressive antitrust and content-moderation agenda.

Violating this new legislation could result in massive fines, something the tech sector has long opposed.

US President Donald Trump has also criticized the EU for "discriminating" against American companies and viewing its enforcement as an attack on US innovation.