Regulatory Risk in Big Tech: Ireland's DSA Enforcement and Its Implications for Tech Multinationals

The European Union's Digital Services Act (DSA), enacted in 2022, has emerged as a cornerstone of global digital regulation, imposing stringent compliance obligations on large online platforms. Ireland, home to the EU headquarters of 13 "very large online platforms" including Meta and TikTok, has become a focal point for enforcement actions under the DSA. Recent investigations into TikTok and LinkedIn highlight the escalating regulatory risks for tech multinationals, with potential fines of up to 6% of global annual turnover and systemic compliance costs that could reshape investor sentiment and corporate governance strategies.

Ireland's DSA Enforcement: A Case Study in Compliance Challenges

The Irish Data Protection Commission (DPC) and media regulator Coimisiún na Meán have launched investigations into TikTok and LinkedIn for alleged DSA violations. TikTok faces scrutiny for failing to provide researchers with adequate access to public data, a requirement under Article 40 of the DSA, and for lacking a functional ad transparency library to clarify user targeting mechanisms. LinkedIn, operated by Meta, is under similar review for user-unfriendly reporting tools and potential "dark patterns" in its interface design that may discourage users from flagging illegal content.

These enforcement actions follow a €530 million GDPR fine against TikTok for data transfer violations to China, underscoring the regulator's aggressive stance. The DPC has ordered Tiktok to suspend data transfers to China if compliance is not achieved within six months, illustrating the layered regulatory pressures faced by platforms operating in the EU.

Financial Impact: Compliance Costs and Investor Sentiment

The DSA's enforcement has already imposed significant financial burdens on tech firms. A 2025 study by the CCIA Research Center estimates that U.S. companies face up to $97.6 billion annually in compliance costs from EU digital regulations, with the DSA contributing $750 million directly. These costs include not only operational adjustments but also potential fines, which could reach $62.5 billion per year under worst-case scenarios. For instance, Meta could face penalties exceeding €9 billion based on its 2024 revenue, while TikTok's potential fine could approach $1.38 billion.

Investor sentiment has shifted in response to these risks. The European Commission's preliminary findings against TikTok and Meta have intensified concerns about the DSA's impact on innovation and growth. A report by the ITIF notes that DSA-related fines in 2024 totaled $6.7 billion, representing 19.5% of the EU's tariff revenue base. This has prompted U.S. policymakers, including the Trump administration, to threaten retaliatory tariffs against the EU, escalating transatlantic tensions. Such geopolitical friction further amplifies uncertainty for investors, who now weigh the long-term viability of EU market access against compliance costs.

Governance Adjustments: Strategic Responses to Regulatory Pressure

Tech firms are recalibrating governance strategies to mitigate DSA risks. Meta, for example, has defended its data-handling practices while emphasizing its commitment to evaluating legal requests against publicly available guidelines. However, the European Commission has criticized Meta's "Notice and Action" mechanisms as user-unfriendly, signaling a need for structural overhauls. Similarly, TikTok has faced allegations of algorithmic design that encourages compulsive usage and exposes minors to harmful content, prompting calls for greater transparency in its operations.

The DSA's enforcement is also driving a broader shift toward interoperability and data access requirements under the Digital Markets Act (DMA). U.S. tech firms, supported by the Trump administration, have lobbied for softened enforcement of these provisions, arguing they disproportionately target American companies. This has led to a contentious dialogue over the balance between regulatory oversight and corporate autonomy, with implications for global governance frameworks.

Conclusion: A New Era of Regulatory Risk

Ireland's enforcement actions against TikTok and LinkedIn underscore the DSA's transformative impact on the tech sector. As the EU transitions from legislative design to active enforcement, companies must navigate a complex web of compliance obligations, financial penalties, and geopolitical tensions. For investors, the DSA represents a material risk factor, with potential fines and compliance costs reshaping valuations and governance priorities. The coming years will test whether tech multinationals can adapt to this regulatory paradigm-or face escalating costs and reputational damage in one of the world's most influential markets.