Europe reins in Big Tech: What you need to know
Ministers sign off on new EU tech rulebook to curb
abuse and harm online.
BY
CLOTHILDE GOUJARD AND SAMUEL STOLTON
November
25, 2021 1:21 pm
European
ministers on Thursday green-lit their versions of two new, massive EU rulebooks
to tame Big Tech and tackle illegal content online.
Economy
ministers from across the bloc rubber-stamped common positions on the digital
competition and content moderation laws known as the Digital Markets Act (DMA)
and Digital Services Act (DSA), at a Competitiveness Council meeting in
Brussels. The ministers' approval paves the way for the EU Council and
Parliament to hammer out final texts next year.
The
regulatory crackdown comes after years of revelations of excesses and harmful
practices on Big Tech's online platforms, ranging from terrorist footage gone
viral to massive sharing of child sexual abuse material and anti-competitive
practices of some the most popular global platforms.
The new
rules are also a key priority for policymakers in Paris. The French government
takes over the presidency of the EU Council in January and is keen to clinch a
final deal on the new laws ahead of the country's presidential election in
April.
"Today is a very important, almost historical
day," France's Digital Minister Cédric O said ahead of Thursday's
discussion, calling the two draft laws "potentially the most important in
the history of digital regulation, both when it comes to the economic side and
content side."
Presented
by the Commission in December 2020, the legal texts lay out rules to force tech
companies to better police content on their platforms and to boost digital
competition by limiting the sprawling power of tech giants such as Google,
Apple, Amazon, Facebook and Microsoft.
Companies
that would violate the new laws could face fines of up to 10 percent of their
global revenues.
The final
version of the two texts could be adopted as early as the first half of 2022.
“We need
these regulations and we have needed them for years now,” Denmark's Minister of
Industry Simon Kollerup told POLITICO ahead of the meeting. “It is an important
milestone in democracy to be able to take back power for the future of the
societies we live in.”
POLITICO breaks down what ministers will agree on at
Thursday's meeting.
Illegal
content crackdown
The Digital
Services Act is a revamped version of e-commerce rules drafted over twenty
years ago. It will lay out rules for how internet players manage content —
affecting everyone from small registrars managing websites' names to massive
social media firms like Facebook and online marketplaces like Amazon.
The aim is
to crack down on child sexual abuse images, terrorist content and dangerous
products but also to force online platforms to open up the black boxes of how
their technology functions.
What's new
for Big Tech?
EU
countries supported much of the Commission’s initial proposal but clarified
some rules, including specifically mandating internet giants to disclose
publicly how many staff are moderating content and the languages they speak.
Recent revelations by Facebook whistleblower Frances Haugen highlighted the
lack of resources the social media firm devotes to tackling harmful content in
languages other than English.
Officials
in Council also added some new ideas. One is to force Big Tech to take measures
to protect children through age verification and parental controls; another to
ban the use of misleading or manipulative design tricks — known as dark
patterns — to nudge users to give their consent to be tracked on platforms to
get personalized recommendation of content.
Capitals
also bolstered a rule for tech companies to notify law enforcement of their
suspicions of a criminal offense, expanding the rule to cloud companies, which
host troves of images.
What's in
it for users?
Users of
online platforms would also be given new rights, including that a platform
should tell them if it restricted the visibility of certain posts or suspended
monetary payments — a boon to influencers and online "creators" that
make a living from social media posts on sites like TikTok and YouTube.
Online
marketplaces such as Amazon, AliExpress and eBay would also be forced to invest
more efforts to check who is selling goods on their platforms — a way to combat
the spread of illegal and dangerous products online. Online buyers would get
better access to redress.
Who will
enforce the rules?
Countries'
most drastic change to the text has been to empower the European Commission to
hold Big Tech accountable, rather than authorities in Ireland, the EU country
where most of the Big Tech firms have their European headquarters. Many
countries including France and Germany have been frustrated with Dublin over
its enforcement of the bloc's privacy law, known as the GDPR, against companies
like Facebook.
When will
this come into effect?
EU
governments want to give tech companies a year and a half before the content
moderation rulebook applies, instead of three months as initially proposed,
meaning the DSA would be first applied in 2024 at the earliest.
More
competition, please
The second
part of ministers' agreement is on the EU’s bid to rebalance the digital
economy and temper the market power of platform giants under a new Digital
Markets Act.
The bill
would impose a series of prohibitions and obligations on so-called
"gatekeeper" platforms — firms that hold a lot of market power in the
digital economy like Google, Amazon, Facebook, Apple and Microsoft.
How will
they be 'reined in'?
These tech
behemoths would be prohibited from combining personal data from different
sources and bundle digital services. Users would also be granted the right to
remove pre-installed apps on their devices.
What
qualifies as a 'gatekeeper'?
A major
sticking point in upcoming negotiations with EU Parliament lawmakers will be
how many other, smaller firms get caught up in the scope based on where the EU
puts the threshold to call a company a "gatekeeper."
The
Commission wants the rules to cover firms with an annual turnover of at least
€6.5 billion in the last three years in Europe and a market capitalization of
at least €65 billion in the last financial year. A firm would also need to have
more than 45 million monthly EU end-users and more than 10,000 yearly active
business users in the EU to be considered a gatekeeper.
The French
government, which will shepherd negotiations with the European Parliament on
the plans in 2022, has favored that the rules target the largest players first
and foremost.
The German
government this week also called for the Digital Markets Act to focus on the
"largest" gatekeepers, asking for the draft law's definition to be
further narrowed down, in a diplomatic note seen by POLITICO.
The
Commission meanwhile has a dozen firms in mind that would fall under the new
rules.
“Member
states each have their own idea of how many firms will come under the scope,”
one EU diplomat involved in the talks said. “We believe that there will be 11
companies that, as things stand, qualify as gatekeeper platforms.”
How does
Washington feel?
Not very
happy. Such a narrow definition could anger the U.S. government, however,
because the rules may disproportionately impact U.S. companies when compared to
other regions.
How does
France feel?
The French
government is confident about finding common ground between EU nations.
"There
still work to do in terms of refining the names of the platforms,"
France's Digital Secretary Cedric O told POLITICO on the sidelines of
Thursday's Competitiveness Council.
"However
there is a form of consensus for identifying the real gatekeepers," he
added.
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