European Union officials have agreed on the language of new legislation aimed at reining in powerful American tech giants like Meta-owned Facebook and Alphabet Inc.-owned Google.
Pending approval for the EU’s Digital Markets Act, designed to prevent tech companies from gaining monopolistic rights to online content.
The proposed legislation includes restrictions on the collection of user data for the purpose of serving targeted ads – a major revenue stream for Google and Facebook.
Big tech companies will also be banned from forcing users to set their products like web browsers as the default option.
The large companies must also ensure that their products and services are “interoperable” with those of their competitors.
This opens up the possibility, for example, that Telegram or Signal users can exchange messages with WhatsApp users. WhatsApp is owned by Facebook parent company Meta.
The new rules, which are expected to come into force as early as October this year, apply to companies with a market capitalization of at least $83 billion and at least 45 million monthly users in the European Union.
Companies that break the rules could face massive fines of 10% of global sales. Firms that break the law could also be forced to sell some of their assets.
The proposed legislation must be formally adopted by the European Parliament and the 27-member EU before it becomes law.
Europe has been more aggressive in regulating big tech than the United States in recent years, although US public opinion has shifted enough that Congress and other regulators are increasingly scrutinizing Silicon Valley companies.
“What we have learned over these years is that in certain cases we can correct, that we can punish illegal behavior,” the EU’s chief competition officer, Margrethe Vestager, told reporters on Friday.
“But if things get systemic then we need regulation too, because if there’s systemic misconduct, if there’s deadlock, then we need regulation.”
“For companies playing the gatekeeper role, the Digital Markets Act will now set the rules of the game.”
Apple said it’s concerned that parts of the Digital Markets Act “will create unnecessary privacy and security vulnerabilities for our users, while others will ban us from charging for intellectual property in which we invest heavily.”
Google said it will review the text and work with regulators to implement it.
“While we support many of the DMA’s ambitions for consumer choice and interoperability, we remain concerned that some of the rules may limit innovation and European choice,” the company said.
Amazon said it is reviewing what the rules mean for its customers. Facebook did not respond to a request for comment.
With postal wires
https://nypost.com/2022/03/25/eu-to-crack-down-on-big-tech-with-new-antitrust-regulations/ EU to crack down on big tech with new antitrust rules