EU flexes muscle against big tech 'gatekeepers'

US tech giants such as Facebook and Google face unprecedented regulation in Europe, as the EU prepares to unveil landmark proposals that could change the face of life online.

The EU wants the Digital Services Act and its accompanying Digital Markets Act to set strict conditions for internet giants to do business in the bloc's 27 countries.

The biggest tech firms will be designated internet "gatekeepers", subject to specific regulation, in a proposal that will be unveiled by EU vice president Margrethe Vestager and commissioner Thierry Breton on Tuesday.

Google, Facebook, Apple and Amazon and maybe a few others will almost certainly be slapped with the designation, which could be compared to big banks that are deemed "too big to fail" and subject to special oversight.

"We've come to a point where the power of digital businesses -- especially the biggest gatekeepers -- threaten our freedoms, our opportunities, even our democracy," said Vestager.

"So for the world's biggest gatekeepers, things are going to have to change. They are going to have to take more responsibility."

The proposals will go through a long and complex ratification process, with the EU's 27 member states, the European Parliament, and a lobbying frenzy of companies and trade associations, influencing the final law.

France and the Netherlands have already come out in favour of Europe having all the tools it needs to rein in the gatekeepers, including the power to break them up.

- 'Blunt and rigid' -

Big Tech, unsurprisingly, is asking for moderation and wants companies to be judged not simply by their size.

"What we could end up having would be blunt and rigid rules targeting size instead of problematic conduct," said Kayvan Hazemi-Jebelli, an expert at the Computer and Communications Industry Association, a big tech lobby group.

For the past decade the EU has taken the lead worldwide in trying to grapple with the insurmountable power of big tech, slapping billions in antitrust fines against Google, but critics believe the method has done little to change its behaviour.

The EU has also ordered Apple to pay billions of euros in back taxes to Ireland, but that decision was quashed by the EU's highest court.

In the meantime, US authorities have taken up the call and are themselves reassessing the role of big tech, with several major antitrust cases putting Google under the gun in addition to a legal bid to strip Facebook of its Instagram and Whatsapp products.

The details of the proposal have been carefully guarded by the European Commission, the EU's executive arm, even though a few details have leaked.

What is certain is that gatekeepers will face built-for-purpose dos and don'ts that may include a ban on companies prioritising their own services on their platforms or chasing away rivals by exploiting data inaccessible to others.

- 'Control their power' -

The Digital Services Act is expected to give the commission sharper teeth in pursuing social media platforms when they allow illegal content online, with the power to inflict fines, possibly through a newly created EU authority, instead of the voluntary system that exists now.

Tech giants will be especially vigilant to maintain their exemption from liability when it comes to illegal content on their platforms, a status they say preserves free speech since it prevents over-enforcement and creates fertile ground for the innovation that triggered the internet revolution.

The proposal may not go as far as reversing that exemption, but it will clearly increase the platform's responsibility by setting out clear rules and incentives for ad transparency and online information.

Google, Apple, Facebook, Amazon and Microsoft fear measures that would set a precedent in the rest of the world, calling into question their way of working, says Alexandre de Streel, co-director of the think-tank Center on Regulation in Europe (Cerre).

"For the first time, we would have asymmetric regulation which would focus only on the big players," he told AFP. "We're going to put rules in place to control their power."

Five things to know about the EU tech rule revolution
Brussels (AFP) Dec 12, 2020 - The European Union will unveil major proposals to regulate Big Tech on Tuesday, in what could force a revolution in the way Google and Facebook do business.

The rules, packaged in a so-called Digital Services Act, will not only attempt to crack down on disinformation and hate speech, but restrain Silicon Valley's giants from making undisputed claims on new markets.

The proposal marks the start of a long process to legislation, which will include a bruising phase of negotiations with lobbyists, member states and the European Parliament that could take years.

Here is a first look at what the EU executive is likely to propose on December 15.

- Gatekeepers -

If the world's biggest banks are too big to fail, the internet will now have "gatekeepers", digital superstars more powerful than many governments, seen as urgently needing their own rules.

The EU believes that Google, Facebook, Apple and Amazon hold all the keys in the online world, with an ability to dictate their own rules and to snuff out potential rivals as soon as they emerge.

To end this, the EU is writing up a set of dos and don'ts specifically for the gatekeepers.

This could stop a company like Google "self-preferencing" Google Maps in search results. It could stop Apple from forcing app-makers to use its store for payments, denying the iPhone-maker its huge cut in the proceeds.

"For the world's biggest gatekeepers, things are going to have to change. They are going to have to take more responsibility," said the EU's executive vice president Margrethe Vestager.

- Stop the hate -

From Twitter to TikTok, all the major online actors are signed up to the EU's codes of conduct for hate speech and disinformation, but playing by the rules is voluntary.

This would change with the EU's proposal: if the likes of YouTube or Snapchat are caught allowing terrorist or criminal content to spread, this could be punished with hefty fines levied by a new European agency.

But, in a disappointment to some, the EU will not make platforms fully liable for this illegal content. Brussels fears that big tech would limit free speech to simply stay out of court.

- Competition -

Big tech moves very quickly, but EU competition enforcement moves very slowly.

In a series of cases, it was only after nearly a decade of EU procedures that Google was slapped with billions of euros in fines, long after many of the complainants were crushed by the search engine juggernaut.

"There's one thing that competition law cannot do and that is revive the dead," said Olivier Guersent, a senior EU official.

Under the rubric called the Digital Markets Act, the EU is seeking to give Brussels new powers to enforce competition laws more quickly, and also put a stop to buyouts even if the evidence is not yet entirely clear.

At the back of everyone's mind are Facebook's "killer app" purchases of WhatsApp and Instagram, small companies that in hindsight could have challenged the social network's supremacy.

- No black box -

The proposal will also seek to open the black box of how big tech chooses the content it displays and to whom.

Big tech's secret sauce for algorithms has become a growing concern, with governments seeing platforms encouraging bias, amplifying sensational or fake news and more generally posing a threat to a stable society.

"One of the main goals of the Digital Services Act... will be to protect our democracy, by making sure that platforms are transparent about the way these algorithms work -- and make those platforms more accountable for the decisions they make," Vestager said.

- Fair shopping -

In a direct shot at Amazon, the proposal will also seek to curb how gatekeepers use the business data of companies operating on their platforms. What stops Amazon from proposing its own products when it sees the success of others sold via its website?

With privileged insights into transactions and communication, platforms can use that information to fine-tune their own products, conquering new markets unfairly.

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