The largest tech companies are now facing tough new regulations in the EU. These measures are intended to be a complete overhaul of EU digital markets. They also include large fines or the breaking up of companies if they fail to comply with the rules.
According to the Commission, the new rules will mean firms will undergo annual checks to ensure they are doing enough to limit harmful and illegal online content.
In addition to this, the EU has announced proposals for restrictions on the use of consumer data, as well as on companies ranking their own products and services higher than their competitors on app stores and search results.
Failing to follow the rules could mean a large fine of up to 10% of a firm’s European annual turnover. Furthermore, “recurrent infringers” could be made to divest “certain businesses, where no other equally effective alternative measure is available to ensure compliance”.
What are the new laws?
The changes involve two new laws: the Digital Services Act and the Digital Markets Act. These have yet to be passed, but could be applied very quickly once they come into effect.
The Digital Services Act is designed to introduce a single set of rules that would help keep EU users safe online, protect their freedoms, and help local authorities hold large tech companies accountable for failing to protect users adequately.
It would also mean the larger and more influential a company is, the stricter the rules will be and the more obligations they will be required to fulfill.
The biggest platforms will face tough scrutiny, which will include annual reviews to ensure they are following the rules. They must also publish a report detailing any major risks, like illegal content and disinformation, and how they have handled these.
The Digital Markets Act will focus on how “gatekeepers” like Google, Facebook, and Apple are regulated, including how they promote their own products over those of their competitors.
The aim of these regulations is to prevent these companies from using their elevated position to gain further advantages in the market.
Some of the new regulations will include not treating their own services more favorably than their rivals, information regulators of planned takeovers, and not using data from their main services to launch new products that will compete with established businesses.
If these laws are passed, they will replace the current rules, which are over 20 years old. It could also influence laws elsewhere, such as in the US, which is also planning on introducing its own new restrictions in the near future.
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