After all-night talks on Thursday, EU member states failed to find a compromise to put forward in negotiations with the European Parliament and the European Commission.
Portuguese agriculture minister Maria do Ceu Antunes said member states had made "numerous concessions" in the talks.
The Digital Services Act, announced by the European Commission in December last year, requires the tech giants to do more to tackle illegal content such as hate speech and child sexual abuse material.
They will also have to do better against misuse of their platforms that impinges on fundamental rights, and intentional manipulation of platforms, such as using bots to influence elections and public health.
Prime Minister Imran Khan chaired a meeting of his senior cabinet members and close aides on Monday, to discuss the resolution passed by the European Parliament, which called for a review of their trade relations with Pakistan.
The European Parliament's resolution is linked with Pakistan's controversial blasphemy laws, and could potentially end Pakistan's eligibility for the Generalised Scheme of Preferences (GSP) trading status.
The resolution was adopted unanimously with 681 Member of European Parliaments (MEPs) voting in favor of this resolution while 3 against it.
It calls on the Commission and the European External Action Service (EEAS) to immediately review Pakistan’s eligibility for GSP+ status and whether there is sufficient reason to initiate a procedure for the temporary withdrawal of this status.
Currently the treaty is provisionally applied, pending the European Parliament's adoption. British MPs ratified it the day it was signed, on December 30, 2020.