The EU commission is readying legislation aimed at regulating the European digital market and curbing the power of the largest technology companies. Expected at the end of the year, the regulation could be a significant overhaul to digital rules and a rude awakening for the Big Tech market leaders.
The European Commission’s aim is to create clearer rules on the responsibilities of digital platforms and greater protections for the rights of their users. Members of the European Parliament called on the Commission in October to put in place legislation fit for the digital age, with current legislation for online platforms dating back to 2000.
MEPs wished to see consumers better protected from illegal or unsafe digital products, stricter conditions for targeted advertisement, and more control for users over what they see online. Most combatively of all, they wanted laws that deal with the asymmetries in the market by targeting the largest platforms.
“Many online businesses have struggled with systematic problems familiar to the platform economy regarding contestability, fairness and the possibility of market entry,” according to a Commission statement.
Increasingly, large online platforms are able to control important ecosystems in the digital economy, the Commission said. This is an obstacle to the healthy competition that the EU seeks to foster within its single market.
The Digital Services Act
Under the proposed new legislation, the Digital Services Act (DSA), the Commission seeks to make the legal obligations for digital technology companies far clearer, particularly as they relate to what users see and how user data is employed online.
“They will have to tell us how they decide what information and what products to recommend to us, and which ones to hide — to give us the ability to influence those decisions, instead of simply having them made for us,” said the EU competition commissioner and head of the digital portfolio, Margrethe Vestager.
Who pays for the ads we are seeing and why we have been targeted with particular content are also points of interest, Vestager explained. The aim is to keep European citizens as safe online as they are offline, both from illegal products and unfair practices, she said.
A second area of the legislation aims to provide new powers which will allow the Commission to impose restrictions on digital market “gatekeepers.” The EU could aim to force large technology companies to share data with other businesses operating in the same industry. This legislation might eventually become part of a broader separate regulation to be known as the Digital Markets Act.
“We need better supervision for these platforms, as we had again in the banking system,” said Thierry Breton, the EU commissioner for the internal market. There is concern, in particular from the public, that Big Tech is “too big to care,” he said.
EU lawmakers have similarly expressed concern that large platforms are able to use the data gained from their users and customers — other companies — to secure unfair advantages in the same or adjacent markets.
Another aspect of the regulation could be the curbing of self-preferencing practices on platforms, through which companies more readily display their own or sister company products and services.
For a number of years now, concerns have been mounting over the lack of oversight for digital service providers, platforms whose choices have real world consequences.
The DSA comes at a time when lawmakers around the world are taking a closer look at the operations and reach of “Silicon Valley” players like Amazon, Facebook, and Google. The US Department of Justice even launched an anti-trust case against Google last month.
The scale and severity of the DSA could still come as a shock to some companies. The Commission engaged with stakeholders as part of the process over the summer, but lobbying could continue to be intensive. A first draft of the legislation is be presented on December 2nd.
Google is allegedly planning an aggressive influence campaign to seed pushback in a bid to have the measures watered down, it was reported in the media.
A separate position paper from industry lobby group EDiMA calls for the DSA to give companies clear legal grounds to act against illegal content, removing it from their platforms. But it pushes for regulation that avoids obligations to moderate against harmful content that is not illegal. The group argues that this would put companies in an uncomfortable position as reluctant arbiters of free speech.