Tech giants in Europe face new rules, backed by huge fines

European officials want new powers to oversee the internal affairs of large tech companies such as Facebook Inc.,

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The multibillion-dollar leer is backed by threats of fines as they seek to expand their role as global tech implementers.

The European Union’s executive branch on Tuesday proposed two bills – one focusing on illegal content, the other on anti-competitive behavior – that would in some cases enable regulators to levy fines of up to 6% or 10% of annual global revenue, or . Large technology companies will stop certain competitive abuses.

The bill does not specify a specific company, but the draft applies to many large U.S. companies, including one or both alphabets. Inc.

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Google, Inc.

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Apple Inc.

And Facebook.

At the same time, the UK, which has opted out of the group, said on Tuesday that it was pushing for a similar law called “harline harmful”. It will oblige social media companies and search engines to take steps to prevent the spread of illegal or potentially harmful content on their platforms or face penalties of up to 10% of annual global revenue.

The UK is also complying with new competition rules for the dominant online online platform, including the power to suspend, block or impose penalties for technology giants’ decisions and non-compliance with its competition regulator’s new digital-markets unit technology.

Together, the two strands of the law amount to the largest potential expansion of global technical regulation in years. Their goal is to update the decades-old law that has saved most tech companies from liability for their users’ activities. The move will also create a new set of competition rules for the cadre of digital giants who have been accused of controlling the market in order to stay in their own positions and outperform competitors.

“We need to make rules that can bring chaos,” the European Union’s Digital-Policy and Anti-Trust Tsar said on Tuesday.

The EU’s pair of proposals will now hang for months or years, given their scope and details, in the same way as the four-year debate before the EU passed its Privacy Act, the General Data Protection Regulation, 201 passed. Each bill must be approved by both. The European Council, which represents the bloc’s 27 national governments, and the directly elected European Parliament to become law.

Technology companies reacted cautiously to new proposals that could still be changed or acted upon. Previously, some have warned against creating a new set of competition rules that could block innovation, or obscure content-moderation liability that could force companies to remove legal content, preventing free expression.

But Facebook, which has complained about Germany’s content-moderation rules, said Tuesday it welcomed the harmonization of EU rules on the issue. The proposals “are on the right track to help preserve what is good about the Internet,” Facebook said.

The European Union’s General Data Security Regulation on Data Confidentiality came into force on May 25, 2018. This video explains how it can affect you even if you do not live in the EU. (Originally published on May 16, 2018)

Karan Bhatia, Google’s vice president of government affairs and public policy, said he was concerned about the proposals, which “specifically target a handful of companies and make it difficult to develop new products to support small businesses in Europe.”

An Amazon spokesman declined to comment, but pointed to a blog post in which the company said the block should ensure that “the same companies apply to all companies.”

“We hope that future negotiations will strive to make the EU a leader in digital innovation, not just in digital regulation,” said Bressergne, vice president of the Computer and Communications Industry Association and head of the Brussels office, which represents companies including Amazon. , Facebook and Google.

One victory for technology companies and their lobbyists is that while keeping the EU proposal intact – for now – a fundamental responsibility ie to protect digital intermediaries from the responsibility for content on their services, they make a concerted effort to resolve problems. But these proposals add to the increasing levels of liability for interline intermediaries based on the role of the digital ecosystem and the number of their customers.

Proposals from European legislators to the U.S. Provides rivals to similar debates in, where the Internet industry’s equal responsibility ieldal is facing criticism from legislators under Section 230 of the Communications Dispensation Act. But the prospect of a change in competition law in Washington and Washington is unclear. In October, a Democratic-led House panel proposed several legislative changes to the power of large tech platforms.

More on EU law

Separately, the federal government has filed two major antitrust lawsuits against Google and Facebook in recent months.

One of the EU’s two proposed bills, the Digital Services Act, would require large tech platforms that reach more than 10% of the EU’s population each month, to actively detect and reduce the risks of illegal content and goods available through their services. It will need an external external debt and new transparency requirements will be imposed on users and regulators.

Larger platforms may be ordered to change their behavior in the wake of such ditches and may face significant penalties if they do not comply – a maximum of EU GDPR privacy laws.

The Digital Services Act will also empower regulators to enforce local laws on illegal content. A city that needs to register a building rent, for example, can order a home-sharing application to remove the list for unregistered property or request information about a host who does not pay taxes, an EU official said in a statement. Was. Law.

Other EU bills, the Digital Markets Act, would pre-emptively restrict certain behavior by treating them as gatekeepers – defining them as European-revenue companies with about 9 .9 billion euros, or with a market capitalization of at least 65 65 billion (some $ billion), which serves more than 10,000 active business customers and 45 million active end users in the group.

For example, such companies may be blocked under the bill from being built to purchase another major service from the gateway of access to one of their services. The law would also impose other obligations on smaller companies and end users, such as providing price transparency for advert online advertisers and allowing data portability for end users.

“We will never say that we believe this company or that company is too big,” European Commissioner for Internal Markets Thierry Brett said on Tuesday. “But we would say that the bigger they are, the more responsibility they have to meet.”

Lobbyists are preparing to fight the bill. The Internet Society, a nonprofit that promotes open internet, said it was concerned that if the proposals were implemented, it would create various rules that could contribute to Internet breaches, said senior director Constantinos Comites.

“The Internet will not die in one fell swoop. He would die from 1000 cuts, ”he said.

Some other groups say more regulation is left, targeting larger tech companies. Reagan McDonald, head of public policy at Mozilla, the nonprofit behind the Firefox web browser, said he supported new provisions in the content bill for the transparency of online advertising for Internet users.

BUUC, an umbrella organization for European consumer-rights groups, said the bill on digital markets should stimulate a rebalance in new competition rules.

“Investigations into the competition could be too slow to prevent unintended losses in the market,” said Monique Goens, the group’s director general. “Instead of picking up the pieces later, it’s the right move to ban some of the practices ahead.”

Write to Sam Schnechner at [email protected]

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