European Commission cracks down on BigTech

The EU has revealed plans for new rules that could see BigTech companies face fines of up to 10 per cent of turnover if not complied with.

Companies that recurringly break the rules will be obliged to take structural measures, potentially leading to divestiture of certain businesses where no alternative measure is available to ensure compliance.

The new rules will come under The Digital Services Act and the Digital Markets Act.

The latter will address the “negative consequences” of BigTech platforms acting as “digital gatekeepers to the single market.”

It will prohibit several “unfair” practices such as blocking users from un-installing any pre-installed software or apps.

The legislation will also require BigTech business put in place certain measures, for example allowing the software of third parties to properly function and interoperate with their own services.

The new regulations will allow the EU to carry out targeted market investigations to assess whether new gatekeeper practices and services need to be added to these rules, to ensure that they keep up with the fast pace of digital markets.

“The two proposals serve one purpose: to make sure that we, as users, have access to a wide choice of safe products and services online,” said Margrethe Vestager, executive vice president for a Europe fit for the Digital Age. “And that businesses operating in Europe can freely and fairly compete online just as they do offline.

She added: “This is one world. We should be able to do our shopping in a safe manner and trust the news we read. Because what is illegal offline is equally illegal online.”

Commissioner for internal market Thierry Breton said: “Many online platforms have come to play a central role in the lives of our citizens and businesses, and even our society and democracy at large.

“With today's proposals, we are organising our digital space for the next decades. With harmonised rules, ex ante obligations, better oversight, speedy enforcement, and deterrent sanctions, we will ensure that anyone offering and using digital services in Europe benefits from security, trust, innovation and business opportunities.”

The Commission said that some very large companies have emerged as “quasi-public spaces for information sharing and online trade,” that have become systemic in nature and pose particular risks for users' rights, information flows, and public participation.

The Digital Services Act will introduce a series of new obligations for digital services, graduated on the basis of size and impact.

These will include rules for the removal of illegal goods, services or content online; safeguards for users whose content has been erroneously deleted by platforms; new obligations for very large platforms to take risk-based action to prevent abuse of their systems; wide-ranging transparency measures, including on online advertising and on the algorithms used to recommend content to users; new powers to scrutinise how platforms work, including by facilitating access by researchers to key platform data; new rules on traceability of business users in online marketplaces, to help track down sellers of illegal goods or services and an innovative cooperation process among public authorities to ensure effective enforcement across the single market.

The Commission said that platforms reaching more than 10 per cent of the EU’s population, around 45 million users, will be subject to specific obligations to “control their own risks” as well as a new oversight structure.

This new “accountability framework” will be made up of a board of national digital service coordinators which will have special powers to supervise very large platforms, including the ability to sanction them directly.

Last month the UK government unveiled a new regime for BigTech designed to give consumers more choice and control over their data, help SMEs thrive and make sure news outlets are not forced out by their bigger rivals.

The Digital Markets Unit, set up within the Competition and Markets Authority (CMA), will also work with Ofcom and the Information Commissioner’s Officer to enforce a new code that will oversee the behaviour of platforms currently dominating the market, including Google and Facebook.

Facebook to move UK users to US terms

The EU digital regulation plans are announced as Facebook reveals it will move UK users onto US user agreements, according to a report by Reuters.

This could put UK users out of reach of Europe’s privacy laws after Brexit.

British users will move out of their existing relationship with Facebook’s Irish headquarters next year.

Google made a similar move earlier this year.

“Like other companies, Facebook has had to make changes to respond to Brexit and will be transferring legal responsibilities and obligations for UK users from Facebook Ireland to Facebook Inc. There will be no change to the privacy controls or the services Facebook offers to people in the UK,” said Facebook’s UK arm.

The social media platform has said that UK users will remain subject to UK privacy law, which for now tracks the European Union’s General Data Protection Regulation (GDPR).

Facebook is making the change partly because the EU privacy regime is one of the world’s strictest, according to Reuters’ sources.

Twitter has said that UK users will continue to be handled by its Dublin office.

The decision comes as the UK is intensifying efforts to ban strong encryption, while Facebook moves towards implementing it on all of its products.

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