Tech giants face new rules in Europe, supported by huge fines

European officials want big technology companies like Facebook to have new powers to oversee internal operations Inc.

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Supported by threats of multibillion-dollar fines, as they seek to expand their role as global technology promoters.

The European Union’s executive branch on Tuesday proposed two bills — one focused on illegal content, the other on antichromatic behavior — which in some cases entitle regulators to fine or break annual worldwide revenues of up to 6% or 10% . Large technology companies to prevent some competitive abuses.

The bills do not mention a specific company, but as drafted, one or both will likely apply to many large US tech companies, including the alphabet. Of inc

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Google, Inc.

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Apple Inc.

And Facebook.

At the same time, the UK, which has pulled out of the bloc, said on Tuesday that it was advancing similar legislation calling it “online harms”. It will create a duty of care to social-media companies and search engines to take measures to prevent illegal or potentially harmful content from spreading on their platforms, or face fines of up to 10% of annual global revenue Had to do.

The UK is also following new competition rules for major online platforms, including a new digital-market unit of its competition regulator to suspend, block or cancel tech giants’ decisions and impose penalties for non-compliance Powers are included.

Together, the two varieties of legislation amount to the largest possible expansion of global technological regulation in years. They aim to update decades-old laws that have protected tech companies from liability for the activities of their users. The measures would also create a new set of competition rules for a cadre of digital giants, alleging control of the online marketplace to capitalize on its own positions and sniff out competitors.

“We need to make rules that can bring order in chaos,” said EU’s Digital-Policy and Antitrust Caesar, Margaret Westerster, on Tuesday.

The pair of EU resolutions will now begin for months or years about their scope and details, as the EU did during four years of debate before its passage in its Privacy Law, General Data Protection Regulations, 2016 Was. Each bill must be approved by both. The European Council represents the 27 national governments of the block, and is the directly elected European Parliament to enact legislation.

Tech companies reacted cautiously to new proposals, which could still be canceled. Previously, some have warned against creating a new set of competition rules that could affect innovation, or content-restraint-regulatory obligations that could push companies to remove legal content, allowing free expression Can be stopped.

But Facebook, which has complained about Germany’s content-moderation rules, said on Tuesday that it had welcomed the harmonization of EU rules on the issue. The proposals “are on the right track to help preserve what’s good about the Internet” Facebook said.

The European Union’s General Data Protection Regulation on Data Privacy came into force on May 25, 2018. This video explains how it can affect you even when you are not in the EU. (Originally published on 16 May 2018)

Karan Bhatia, Google’s vice president of government affairs and public policy, said he is concerned with proposals that “specifically target a handful of companies and make it harder to develop new products to support small businesses in Europe” . “

A spokesperson for Amazon declined to comment, but pointed to a blog post in which the company said the block should ensure “the same rules for all companies”.

“We hope that future negotiations will try to make the EU a leader not only in digital regulation but also in digital regulation,” said Christian Borggreen, vice president of the Brussels office at the Computer and Communications Industry Association, which represents companies including Amazon . , Facebook and Google.

A win for tech companies and their advocates is that the EU proposal is still intact — yet digital intermediaries have been granted a basic liability shield protecting them from responsibility for the content on their services, as they address problems Strive in harmony to overcome. But the proposals add increasing layers of obligations to online middlemen based on their role in the digital ecosystem and the number of their customers.

European legislative proposals provide a countermeasure to similar discussions in the US, where the Internet industry’s similar liability shield — Section 230 of the Communications Decency Act — has faced criticism from legalists. But the prospects of a competition law in Washington are unclear. In October, a Democratic-led House panel suggested several legislative changes to rein in the power of large technology platforms.

More on EU legislation

Separately, the federal government has filed two major antitrust motions against Google and Facebook in recent months.

The Digital Services Act, one of the two proposed bills of the European Union, would require large technology platforms that reach more than 10% of the EU population each month and activate risks from illegal content and goods available through their services To see and minimize. This would require annual external audits and implement new transparency requirements for users and regulators.

Larger platforms may be ordered to change their behavior after such an audit and may face significant penalties if they are not more compliant than the EU GDPR privacy law.

The Digital Services Act will also empower regulators to enforce local laws on illegal content. An EU official said in a presentation that a city that requires a house rental to be registered, for example, a home-sharing to remove a listing for an unregistered property. Can order the application or ask for information about such a person. Law.

Another European Union bill, the Digital Markets Act, would ban some behavior on what it does to be the gatekeeper – defined as companies with European revenues of at least 6.5 billion euros, about $ 7.9 billion. , Or market capitalization of at least 65 billion euros (some 79 billion dollars), and which serve more than 10,000 active business customers and 45 million active end-users in the block.

For example, such companies may be blocked under the bill by tying the ability of gatekeepers to access their services to any other core service. The law will also create other obligations for small firms and end users, such as offering price transparency for online advertisers and allowing data portability for end users.

“We would never say that we believe this company or that company is too big,” said European Commissioner for the Internal Market Thierry Breton. “But we would say that the older they are, the more responsibilities they have to fulfill.”

Lobbyists are preparing to fight on the bill. The Internet Society, a nonprofit that promotes the open Internet, said it is concerned that the proposals, if enacted, would create different sets of rules that could contribute to fracturing the Internet Said Senior Director Constantino Comitis.

“The internet is not going to die from a cut. It is about to die by 1,000 cuts, ”he said.

Some other groups say that more regulation targeting large tech companies is overdue. Regan Macdonald, head of public policy at Mozilla, the nonprofit company behind the Firefox web browser, said she supports new provisions for transparency in online advertising for Internet users in the content bill.

BEUC, an umbrella organization for European consumer-rights groups, said the new competition rules in the digital markets bill should spark an imbalance.

“Investigation of competition may be too slow to prevent irreparable damage on the market,” said the group’s director general, Monique Goyens. “Stopping some frontal practices is the right step rather than lifting the pieces later.”

Write Sam Schechner at [email protected]

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