- The EU is on the cusp of unveiling a host of new policy plans which could have serious implications for tech giants like Apple, Facebook, and Google.
- Officials have drawn up proposals for the Digital Services Act and the Digital Markets Act, which could force big firms to take greater responsibility for the content on their websites, ban them from taking anti-competitive actions – and threaten multi-billion dollar fines.
- Big Tech is pushing back against the legislation, with five of the biggest players having spent more than $20 million on lobbying efforts in the EU, reports say.
- We broke down everything we know so far about the upcoming announcements, expected on Tuesday.
- Are you involved the drafting of the new policies? Contact the author at [email protected]
- Visit Business Insider’s homepage for more stories.
The EU is set to unveil a raft of new policy proposals designed to curb the influence of the likes of Amazon, Apple, and Facebook this week, following a decade of scandals, antitrust investigations, and mounting scrutiny on the continent.
After a week-long delay, European legislators are now expected to unveil the Digital Services Act (DSA) and Digital Markets Act (DMA) on Tuesday. While the content of either is yet to be officially confirmed, reports suggest both could have serious consequences for the world’s biggest tech companies.
“The Commission has kept its cards pretty close to its chest on this one,” Raegan MacDonald, head of EU public policy at Mozilla, told Business Insider. “We’re all anxiously waiting to find out exactly what the letter of the law will be.”
Even though there’s a way to go before either the DSA or DMA are actually implemented, with insiders predicting another two years of debate among members of the EU’s Parliament, Commission, and Council, legislators are expected to throw down the gauntlet with a bold mission statement for the future of the internet.
Everything we know about the Digital Services Act
The DSA is expected to demand bigger tech companies take greater responsibility for the content on their platform, such as political misinformation, illegal content, and the sale of counterfeit goods.
Up until now, tech companies like Facebook and Amazon have pretty much been free to police their platforms at their own discretion. But the DSA could be about to change all that.
Officials are apparently considering imposing a “two-tier” system, according to the Financial Times, which would see the tech giants subjected to greater scrutiny than their smaller competitors. It’s thought these measures could be implemented based on how many EU customers a firm has, or how many of the bloc’s member states it operates in.
In order to get a better grip on “online harms”, experts suggest firms could be forced to be more transparent with how their algorithms recommend products and content. “I think legislators are really looking at how they can target the causes of these issues, rather than just dealing with the symptoms,” said MacDonald.
According to leaked documents obtained by Reuters, “very large” online platforms will be defined as those having 45 million users or more on in the EU, and will face fines worth up to 6% of annual turnover if they breach the new rules. This goes even further than current GDPR privacy regulation, which sets fines at 4% of turnover.
Likewise, just as GDPR requires companies to install a point of contact, usually an internally-appointed data officer, insiders say the likes of Google and Apple could be forced to appoint individuals to oversee compliance with the DSA.
Everything we know about the Digital Markets Act
There’s one word on everyone’s lips when it comes to the DMA: “Gatekeepers.”
Exactly how a gatekeeper will be defined remains unclear, although it’ll likely be based on the number of users a firm has, and how many types of business it operates.
The classic example is Amazon, which simultaneously runs an online marketplace, while also acting as a retailer selling its own products within that marketplace.
The Wall Street Journal previously revealed how Amazon had used data from sellers on its site to launch competing products. But the DMA could, for example, force Amazon to share the data it collects with sellers using its platform. Likewise, Airbnb could be told to share similar data with those renting out property on its site.
“Many companies depend on Amazon to reach their customer base,” explained MacDonald. “But the decisions Amazon makes upstream can have a lot of impacts downstream. At the moment, there aren’t really any legislative levers for that.”
The DMA is also expected to clamp down on “unfair self-preferencing”, such as pre-installing its own apps on its hardware products. For the past few years, Google has held quarterly auctions offering competing search engines default space on its Android phones, in an attempt to appease EU lawmakers following a $5 billion antitrust fine.
Big Tech is not happy about the EU’s plans
In the first six months of 2020, Amazon, Apple, Facebook, Google, and Microsoft spent a combined $23 million on lobbying in the EU, according to Transparency International, a group that monitors such activity on the continent.
Last month, Google CEO Sundar Pichai was forced to apologize after a leaked internal document revealed the firm intended to target lobbying efforts at Thierry Breton, the EU internal market commissioner spearheading the new legislation.
Meanwhile, Google-owned YouTube also pushed back against the incoming legislation, with the firm’s CPO Neal Mohan warning against supposed two-tier legislation.
“Anything that the DSA does has to apply to all companies, all platforms, not just the large ones but the small ones as well,” he said in an interview with Politico. “Platforms that are small today can become large in a matter of months.”
Twitter, Tumblr, and Vimeo published a joint letter last week, urging EU officials to take a flexible approach towards the policing of harmful content online.
“By limiting policy options to a solely stay up-come down binary, we forgo promising alternatives that could better address the spread and impact of problematic content while safeguarding rights and the potential for smaller companies to compete,” the letter read.
Travel startups like Airbnb and Booking.com could also be subject to tough new regulations, despite warnings from the latter’s CEO the rules would “hobble” the firm.
“We are one of the very, very, very few tech successes in Europe. Let’s be obvious and blatant about this. And our government regulator wants to handcuff us,” chief exec Glenn Fogel told the FT. “European companies will suffer.”
The DSA and DMA are expected to be announced in full on Tuesday.