So-called “gatekeeper” tech companies reportedly could face fines as high as 10% of their annual revenue if they don’t comply with new European Union rules on data usage.
The new rules are scheduled to be released on Tuesday and could affect such companies as Amazon (AMZN) – Get Report, Apple (AAPL) – Get Report, and Alphabet (GOOGL) – Get Report, according to Bloomberg, which said it has seen a draft of the regulations.
The new Digital Markets Act will target “gatekeeper” companies, defined by the European Commission by a number of criteria, including the number of users in the millions and overall revenue in the billions of dollars, as well as their significant impact on the single market, Bloomberg reported.
The designations will be updated by the commission every two years, according to the document.
Companies will be banned from using any data from business users to compete with them or from treating their own services more favorably in rankings, among other obligations.
A company that “systemically infringes” the obligations could face orders by the European Commission to make behavioral and structural changes, such as divesting businesses.
Companies would be considered to be in systematic non-compliance if the EU has issued at least three fines within a period of five years.
The rules are still in draft form and could be subject to revisions. Once they are proposed it could take months or years before they become law.
EU digital chief Margrethe Vestager has said the gatekeeper rules should complement antitrust law, which grants regulators power to investigate firms for past behavior.
Regulators all over the world have been pressuring big tech companies over concerns about their size and potential power.
Last week, the Federal Trade Commission and most states filed an antitrust lawsuit against Facebook (FB) – Get Report, charging that the company engaged in anticompetitive behavior to maintain a monopoly position in personal social networking.