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BRUSSELS: American tech companies including Amazon, Apple, Facebook and Google face fines of up to 10 percent of annual turnover and could even split under draft European Union rules announced Tuesday to curb their powers.
The rules are the most serious attempt by the 27-nation bloc to curb tech companies that control vast amounts of data and online platforms that are trusted by thousands of companies and millions of Europeans for their work and social interactions.
They show the European Commission’s frustration with its antitrust cases against tech giants, notably Alphabet’s Google, which critics say has failed to address the issue.
But they risk inflaming tensions with Washington, already annoyed by Brussels’ attempts to tax US tech companies more.
“It appears that Europe intends to punish successful companies that have invested heavily in Europe’s economic growth and recovery,” Myron Brilliant, executive vice president of the US Chamber of Commerce said in a statement.
Regulatory scrutiny has increased around the world on tech giants following a string of privacy and misinformation scandals, as well as complaints from some companies that they abuse their market power.
EU Internal Market Commissioner Thierry Breton dismissed suggestions that the rules could be discriminatory.
“Everyone is welcome in Europe. Our responsibility is to give direction, rules to protect what is important to us,” he told a news conference.
One set of rules, the Digital Markets Act (DMA), targets so-called online gatekeepers, defined among other things as companies with more than € 6.5 billion in European annual turnover in the last three years, € 65 billion. in market value and providing a central platform service in at least three EU countries.
This establishes a checklist of what to do, such as sharing certain types of data with rivals and regulators, and what not to do, including stopping favoring your own services on their platforms and asking for fines of up to 10% rotation of companies that do not comply, or a break order as a last resort.
Guardians will also have to report merger offers to authorities, a move designed to prevent acquisitions from wiping out rivals.
DOUBLE APPROACH
A second set of rules, the Digital Services Act (DSA), also targets very large online platforms, defined as those with more than 45 million users.
They will be required to do more to address illegal content, misuse of their platforms that violate fundamental rights, and intentional manipulation of platforms to influence elections and public health, among other requirements, or face fines of up to 6 percent of global turnover.
Companies will also have to display political advertising details on their platforms and the parameters used by their algorithms to suggest and classify information.
“The two proposals have one purpose: to make sure that we, as users, have access to a wide selection of secure products and services online. And that companies operating in Europe can compete freely and fairly online as they do outside of Europe. This is a world, “said European Competition Commissioner Margrethe Vestager, who has taken on the four US tech giants.
Google warned that the new rules could affect innovation and growth.
“We are concerned that they seem to specifically target a handful of companies and make it difficult to develop new products to support small businesses in Europe,” said Karan Bhatia, Vice President for Government Affairs and Public Policy.
Amsterdam-based Booking.com, which could end up being classified as one of the few European gatekeepers, asked for broader criteria.
“It can’t just be about the size or number of users of a platform. It should be about blocking it from consumers,” he said.
The draft rules must be approved by EU countries and EU lawmakers, some of whom have pushed for stricter laws, while others are concerned about regulatory scope.
Tech companies, which have called for proportionate and balanced laws, are expected to take advantage of this split to push for weaker rules, with the final draft expected in the coming months or even years.
Differences between the tech giants could dilute the opposition. Facebook, for example, has urged the EU to control Apple.
“We hope that the DMA will also set limits for Apple. Apple controls an entire ecosystem from the device to the app store to applications, and uses this power to harm developers and consumers, as well as big platforms like Facebook.” the US social network said in a statement.
