Today the EU Commission presents a package that aims to put tech giants in their place. What that means for us users.
It has been 20 years since the EU laid down comprehensive rules for digital services and online platforms. Since then, not only have Amazon, Facebook and Google grown into huge corporations with enormous influence, but phenomena such as fake news campaigns and hate speech have also emerged. Now the EU Commission is taking a run for fairer conditions on the internet.
The EU Commission Vice-President Margrethe Vestager, responsible for digital, recently said that we are at a point “at which the power of digital companies – especially the largest gatekeepers – threatens our freedoms, our opportunities, even our democracy”. So things would have to change for the largest platforms. It could be a huge turning point for today's internet.
In fact, there are two proposals: the Digital Services Act (DSA) and the Digital Markets Act (DMA). Roughly speaking, this is intended to curtail the market power of tech giants and ensure more fairness in the digital market. Uniform rules across Europe should make it easier for small companies to compete with the big ones. In addition, Internet platforms should take more responsibility for the content that is published on their pages.
The package is also so important because the EU legislation in the coming years should build on it: “It is the basis for the regulation of platforms of all kinds, and we can dock specific laws and requirements to this today and in the years to come”, said EU Internal Market Commissioner Thierry Breton recently to «the world». He cited terrorism, child pornography and hate speech as examples.
So far, the law of the fittest has sometimes applied online in the EU. That should end. The EU Commission has been trying for a long time to take a more consistent course towards Facebook, Amazon, Google and Co. For a long time, however, the authority relied on voluntary action – for example in the fight against fake news campaigns in social networks.
At the same time, the Vestager responsible for competition imposed billions in fines, for example against Google and Amazon. The Dane accused the companies of having illegally used their market power. The problem: Such penalties are only imposed after years of investigation. Possible competitors may no longer exist.
At the same time, digital start-ups have to deal with a number of legal situations in the EU, depending on the topic. That makes the business complex and unattractive for the little ones. Germany, for example, pushed ahead with the NetzDG against hate crime, much to the displeasure of the EU Commission. Large companies with the necessary resources can handle such a fragmented market better.
The Brussels authority wants to use several levers. Vestager, as the EU Commission's top digital politician, and Breton are jointly responsible. A new tool is to be introduced in the DMA that will take effect before certain markets tip over – that is, the power of an individual company becomes uncontrollable. This would be a big step towards more agency for the EU.
At the same time, the platforms that have so far decided for themselves which content to delete and why not, should receive specifications for the moderation of content. According to a report in the Financial Times, which refers to a draft law proposal, they should share data on how they deal with illegal content with authorities and researchers. Advertising should be labeled transparently. And sales platforms like Amazon should check the providers on their pages. Consumer advocates had repeatedly complained that online customers were not safe from counterfeit products.
A fundamental liability of the platforms, for example for illegal content on their pages, is probably not intended. Accordingly, the previous principle would remain that, for example, Facebook does not have to delete illegal content until the company is informed.
In the meantime, the EU Commission has been thinking more or less loudly that a new EU authority could be responsible for the control. The political magazine “Politico” states that the EU Commission will in future, through a new body, the European Committee for Digital Services, help monitor potential EU-wide problems.
According to the draft, to which the “Financial Times” is referring, the companies face fines of up to six percent of the turnover in the previous year – with the big players, this can quickly run into billions. The actual amount should depend roughly on how severe and how long the rule violation was. Accordingly, what a “very large platform” is to be defined for the first time in the EU. This term should apply when a platform has more than 45 million users in the EU and thus has a disproportionate amount of influence. Such companies should appoint one or more compliance officers to ensure that the new rules are implemented.
The EU Commission is currently not considering breaking up the tech giants. In the USA, at least with a view to Facebook, things look different. The government in Washington and more than 40 states want to break up the group, which also includes the messenger service Whatsapp and the photo app Instagram, because of unfair competition in court.
It will not be easy to curb the market power of the large US corporations, which have been lobbying massively for months for proposals from Brussels that are as pleasing as possible. The EU Commission always tried to make its proposals look as harmless as possible: companies are more than welcome to be successful in the EU – but only if other companies are not unlawfully held down, said Vestager.
