Draft EU rules propose mammoth fines, bans for tech giants

BRUSSELS-Agence France-Presse

Draft EU rules to be unveiled on Dec. 15 would see tech giants face huge fines or banned from the market for breaches, sources said, posing a major challenge to the likes of Google and Facebook.

The EU Commission is gearing up to present its long-trailed Digital Services Act and its accompanying Digital Markets Act to lay out strict conditions for internet giants to do business in the 27 countries.

EU sources told AFP on Dec. 14 the landmark legislation would see tech behemoths facing fines of up to 10 percent of their revenues for breaking some of the most serious competition rules.

It could also see some of the world’s biggest firms banned from the EU market "in the event of serious and repeated breaches of law which endanger the security of European citizens", the sources said.

The proposals - which could revolutionize how Big Tech does business - aim to tackle hate speech and disinformation online and curb the might of leading firms to dominate markets.

The largest companies would be designated as internet "gatekeepers" under the legislation, subject to specific regulations to limit their power over the market.

Some ten firms - including Google, Facebook, Apple, Amazon and Microsoft - will be slapped with the designation.

The draft laws will go through a long and complex ratification process, with the EU’s member states, the European Parliament, and company lobbyists and trade associations influencing the final law.

"The idea is not to do away with the large platforms, but to impose rules on them to prevent them from posing risks to our democracy," the bloc’s industry commissioner Thierry Breton said.

The details of the proposals have until now been carefully guarded by the European Commission, the EU’s executive arm, even though a few have leaked.

The main intention of the new rules is to update legislation that dates back to 2004, when many of today’s internet giants either did not exist or were in their infancy.

The Digital Services Act is being touted as a way to give the commission sharper teeth in pursuing social media platforms when they allow illegal content online.

Under the Digital Markets Act, the EU is seeking to give Brussels new powers to enforce competition laws more quickly and push for greater transparency in their algorithms and use of personal data.

Tech giants will need to inform the EU ahead of any planned mergers or acquisitions under the regulations, Breton said.

There has been growing concern among European and US regulators that the big tech firms have used purchases as a way to nip potential rivals in the bud.

Examples include Facebook’s acquisition of Instagram and WhatsApp as well as Google’s purchase of YouTube and Waze.

For the past decade the EU has taken the lead worldwide in trying to grapple with the insurmountable power of big tech, slapping billions in antitrust fines against Google, but critics believe the method has done little to change behavior.

The EU has also ordered Apple to pay billions of euros in back taxes to Ireland, but that decision was quashed by the EU’s highest court.

France and the Netherlands have already come out in favor of Europe having all the tools it needs to rein in the gatekeepers, including the power to break them up.