OpenAI's ChatGPT and gaming platform Roblox Corporation are set to join an exclusive club of technology firms operating under the European Union's most stringent regulatory regime. The European Commission is expected to formally designate both companies as "very large online platforms" under the Digital Services Act by August, a decision triggered by their surpassing the 45 million monthly active user threshold within the EU bloc. This classification places them alongside Meta Platforms and Elon Musk's X on a shortlist of platforms subject to the bloc's most demanding compliance and transparency obligations.
The Digital Services Act, which came into force in 2022, represents the EU's most comprehensive attempt to regulate the digital ecosystem and establish continental standards for online conduct. The legislation imposes a fundamentally different operating model for platforms deemed "VLOPs"—the regulatory acronym for very large online platforms—fundamentally reshaping how these companies can moderate content, interact with users, and conduct business across Europe. Rather than setting absolute rules about what content must be removed, the DSA framework focuses on transparency, risk mitigation, and accountability mechanisms that platforms must implement and report on to European authorities.
For ChatGPT and Roblox, this designation carries immediate practical consequences. Both companies must now implement systematic approaches to identifying and countering illegal and harmful content on their services, with particular emphasis on protecting minors. The requirement extends beyond simply removing problematic material—platforms must publicly explain their moderation strategies, detail how algorithms recommend content, and document their efforts to minimize harms. These transparency reports must be filed regularly with the European Commission, creating a documented record of compliance efforts that regulators can scrutinise.
The financial implications are substantial. Companies designated as VLOPs must pay annual compliance fees to the European Commission, with amounts scaled according to revenue and platform scale. More significantly, non-compliance or breaches of DSA requirements can result in fines reaching six percent of a company's global annual sales—a penalty structure that has concentrated minds in Silicon Valley. For context, such fines would represent potentially billions of euros for large technology corporations, making regulatory adherence a critical business consideration rather than a peripheral compliance matter.
Roblox faces particular scrutiny given its primary user base of children and teenagers. The platform has previously confronted criticism regarding the adequacy of its safety protections, with concerns raised about inappropriate interactions between users and exposure to harmful content. In response, Roblox has recently introduced more robust parental controls and expanded monitoring of user communications, attempting to address these vulnerabilities before the formal VLOP designation. The company is simultaneously expanding its advertising business, which brings it into conflict with DSA requirements mandating heightened transparency around marketing targeting minors—a deliberate EU policy designed to limit commercial manipulation of young audiences.
The DSA's child protection focus reflects broader European policy thinking that treats online platforms differently from traditional media. Rather than content-neutral common carrier status, the EU regulatory model presumes that platforms have affirmative obligations to protect vulnerable users. This represents a philosophical divergence from American approaches that emphasise platform neutrality and user choice. For companies operating across both jurisdictions, this creates compliance complexity—techniques and policies acceptable under American law may violate European requirements, necessitating distinct operational frameworks for different geographic markets.
ChatGPT's designation as a VLOP signals regulatory concern about generative artificial intelligence systems and their integration into mainstream consumer applications. While the DSA predates the current wave of AI enthusiasm, regulators have adapted the framework to address algorithmic systems that can amplify harmful content, generate false information, or exhibit bias. OpenAI must now document how it mitigates risks from ChatGPT's outputs, including mechanisms to prevent misuse for creating disinformation, generating content targeting minors, or facilitating illegal activities. This represents uncharted regulatory territory, as the DSA was not specifically designed for AI systems.
The Commission has pursued an aggressive enforcement posture since the DSA took effect, initiating more than a dozen formal investigations into various platforms. In December, X received a €120 million fine for deceptive design patterns and inadequate transparency disclosures, with the company subsequently appealing the decision. More recently, Alibaba's e-commerce platform was penalised €550 million for failing to adequately police counterfeit and unsafe products—demonstrating that VLOP designation creates genuine financial jeopardy, not merely theoretical compliance obligations. These enforcement actions signal that the EU intends the DSA to function as a meaningful regulatory tool with teeth, not window dressing.
The regulation has provoked significant diplomatic tension between the European Union and the United States. The Trump administration has characterised the DSA and broader EU technology regulation as discriminatory censorship targeting American companies. This criticism reflects a fundamental disagreement about the appropriate balance between platform autonomy and regulatory oversight. American policymakers typically advocate for light-touch regulation and litigation-based enforcement, while European regulators favour proactive administrative oversight and preventive requirements. For technology companies operating globally, these divergent regulatory philosophies create strategic challenges in designing compliance systems that satisfy both jurisdictions.
For Malaysian technology companies and regional operators, the ChatGPT and Roblox designations carry important implications. As these platforms implement enhanced compliance infrastructure to satisfy European requirements, they establish de facto global standards that other jurisdictions increasingly reference. Southeast Asian regulators monitoring the EU approach may adopt similar frameworks for their own platforms and markets. Additionally, any technology company aspiring to significant user bases across multiple geographic regions will likely need to implement VLOP-equivalent compliance systems regardless of whether they technically meet regulatory thresholds, making the EU approach increasingly influential across digital markets globally.
The ChatGPT and Roblox designations also highlight the growing power imbalance in global technology regulation. The EU's 450 million consumers and comprehensive regulatory authority allow it to dictate terms to even the largest American technology firms. Companies cannot easily ignore European requirements without exiting valuable markets, effectively giving the EU veto power over global platform design choices. This regulatory asymmetry—where smaller markets like the EU exercise outsized influence—represents a structural shift in how global technology governance is evolving, with consequences extending far beyond European borders into Southeast Asian markets where many users interact with these same platforms daily.
Both companies face September deadlines for submitting detailed risk assessments and mitigation plans as required under VLOP designation. These documents will become focal points for regulatory scrutiny and potential enforcement action. For ChatGPT and Roblox, the coming months will involve substantial investment in compliance infrastructure, legal expertise, and operational adjustments. The question facing their European operations is not whether to comply—the financial and legal consequences of non-compliance are too severe—but rather how to structure compliance systems that maintain platform functionality and user experience while satisfying regulators who are increasingly willing to deploy the DSA's enforcement mechanisms.
