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The EU Commission today presented its plans for a legislative review of the digital space. In case of violations, they threaten heavy fines.
Facebook, Booking.com, Google – Tech companies and digital platforms are often criticized for their business practices. One of the reasons is that these companies rely heavily on data and therefore penetrate deeply into the personal areas of their users. Another is that this economy tends toward a winner-take-all principle: those ahead of the competition eliminate the smallest.
Where does the EU apply the lever?
The reform process intervenes at two levels: markets and services. The markets are the operators of the digital platforms themselves. Companies like Google or Amazon, for example. If they are of a certain size, they should be more strictly monitored and regulated. For example, with stricter security and transparency requirements. For example also with acquisition plans. There are several thresholds that place a company in this category. For example, that they reach 10 per cent of EU citizens and have an annual turnover in the Union of at least 6.5 billion euros. Thus, above all, the usual suspects among US technology companies are covered. Smaller companies are getting less on the sidewalk. This should allow the competition to develop on a more even playing field.
What do the new laws mean for users?
These concerns are taken into account with the laws regarding digital services. Its objective is to ensure that users are better protected against illegal or dangerous content and goods and that they have more means to defend themselves against these types of digital scams. For example, by making platform operators more responsible if they contribute to the spread of illegal or unfair offers. In addition, there should be clearly designated notification points that affected users can contact.
Is the EU giving birth to its next paper tiger?
This danger exists. The project was preceded by a long initial exploration process in the EU countries. But the reform project will meet resistance in the economy. Especially since drastic penalties are foreseen for infractions. We are talking about up to 10 percent of the annual worldwide turnover of a company. For Google with 162 billion in 2019, a fine for violations would amount to 16 billion. The possibility of destroying very powerful corporate structures must also be incorporated. Furthermore, the law has yet to follow the bumpy path of the EU legislative process, which, as is well known, can drag on. Even more so because the legislative project covers areas that in part are already regulated in another way.
What does this mean for Switzerland?
Swiss companies operating in the EU will also be covered by a new digital law. In the league of giants, which are more strictly regulated, none of them follow suit. In Switzerland, a revision of the law comparable to the one the EU is seeking is not yet in sight. However, there are already several cases here that have shown that existing laws can be overwhelmed by the digital disc. For example, in relation to the legal status of Uber drivers (employed or self-employed?) Or with the dictation of prices from booking platforms such as Booking.com. A consultation process is currently being carried out on the latter, known as Lex Booking. Explore the extent to which such booking platforms can force providers like hotels to offer rock-bottom prices.
