What happened: The EU proposed 2 bills on Tuesday that, if passed, would empower regulators to levy fines on the Big Tech up to 6–10% of their annual worldwide revenue or, worse yet, break them up.
- Though the bill didn’t mention any company specifically, it’s obvious who they’re talking about: Google, Facebook, Amazon, Apple…
Firstly, the Digital Services Act will force these companies to act quicker against illegal content and make content takedowns more transparent.
- Basically, large platforms that don’t remove illegal posts will face fines up to 6% of their annual revenue.
And, the Digital Markets Act will prevent these companies — or “gatekeepers” as the EU labelled them—from anti-competitive behaviour, including self-preferencing.
- online “gatekeepers” are companies that control data and access to their platforms on which thousands of businesses rely. For example, Apple controls complete access to the iOS app market. Amazon controls access to Amazon.com marketplace. Google to its search results.
DOs and DON’Ts. For example, these will have to share certain kinds of data with rivals and regulators. And don’t favour their own services on your platform or harvest data from your platforms to compete with other businesses.
Also, these companies will have to inform regulators before buying smaller rivals.
- “don’t favour your own services” means Amazon shouldn’t place AmazonBasics product above others. Apple and Google shouldn’t pre-install their apps on phones.
- “don’t harvest data from platforms to compete with other businesses” means Amazon can’t track what products do well on Amazon.com and then start selling their own version of it. (Yes, Amazon does it.)
- “inform regulators before buying small rivals” means Facebook cannot buy any company it fears competition from, without EU approval. Unlike what it did with WhatsApp and Instagram.
What if they break the rules: Fines go as high as 10% of annual global revenue and repeat offenders can be broken up. (Example: Facebook broken into Whatsapp, Instagram)
Will it pass? When? While it’s very likely that these proposals will pass, they will not pass until 2023 or so. Tech companies will fight them as hard as they can.