Europe Finally Set to Vote on How to Control Biggest Tech Firms

·3 min read

(Bloomberg) -- European lawmakers vote today on new laws that will attempt to rein in the world’s largest tech companies.

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The Digital Market Act was always expected to hit Google, Facebook, Amazon, Apple and Microsoft, but will now include and could later include online marketplaces Zalando and Alibaba.

Proposals on Monday’s ballot include:

  • Forcing competing messaging apps to let their users chat cross-platform

  • Requiring consent from a user to make an app or app store their default

  • Whether to prohibit some companies targeting ads to minors

Additionally, they want to be able to restrict mergers “for a limited period” if companies violate proposals designed to prevent what the EU calls “killer acquisitions,” where businesses buy a rival before it can become a threat.

Former Facebook employee turned whistle-blower Frances Haugen said the bloc’s plans have the potential to become the “global gold standard.”

At the end of 2020, the European Commission proposed the Digital Markets Act to target anti-competitive behavior, as well as the Digital Services Act, which focuses on illegal content.

Read more: EU’s Ambitious New Tech Rules to Be Delayed Further Into 2022

Lawmakers spent the subsequent period fighting over issues such as which companies should be accountable, and whether the EU was unfairly targeting American businesses as a result of setting thresholds for accountability too high. The debate trails years of aggressive antitrust enforcement that did little to curb growing market shares for tech companies in Europe.

It’s been agreed that companies will be considered “gatekeepers” if they have a market capitalization of 80 billion euros ($90.2 billion) or annual sales of 8 billion euros for three consecutive years, have 45 million users a month in the European Economic Area and operate at least one core platform.

Penalties for breaking the rules -- for example, by targeting ads to minors -- could yield fines of as much as 20% of global annual sales, far higher than current EU antitrust fines.

Read more: Tech Giants Face a Weapon the EU Thinks It Will Never Use

Left-wing lawmakers such as Germany’s Martin Schirdewan said the rules should cover more than 25 “monopolistic digital companies,” while center-right opponents including Andreas Schwab, also German, pushed for only four or five companies to be included.

“The Commission can start with Google and Facebook, then will come Amazon and Apple, then they will look after Microsoft and Booking, and then they will come together,” Schwab said.

Dutch parliamentarian Paul Tang agreed it was correct to “concentrate on limited numbers as long as the Commission is able to extend the list.”

The more contentious debates though are over the Digital Services Act, which seeks to fight illegal content. Parliamentarians are still debating how to address harmful content and how far to restrict ad targeting, with some left-wing lawmakers pushing for a complete ban on targeted ads.

The committee in charge of writing the rules will vote today on the proposal, while the rest of the European Parliament will sign off next month. This will allow negotiations with the Commission and the 27-nation bloc to commence next year -- when debates over which companies should be included in the new rules will continue.

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