Big Tech Companies Could Face More Rules in the EU -- 2nd Update
May 10 2017 - 10:47AM
Dow Jones News
By Natalia Drozdiak
BRUSSELS--Tech companies in Europe face the prospect of more
rules dictating how they conduct business.
The European Union's executive body is considering new rules
that would prevent web platforms, such as Alphabet Inc.'s Google,
Amazon.com Inc. and TripAdvisor Inc., from offering unfair terms to
small businesses that use their services to sell or promote
products.
The European Commission on Wednesday said it wants to address
complaints by businesses about unilateral contract changes, lack of
access to essential sales and customer data and poor transparency
regarding companies' rankings in search results. Companies also
lack possibilities for redress to resolve disputes, the EU
said.
"It's quite clear to us that the platforms are gatekeepers and
in the business-to-business relationships there are a certain
number of problems," said Jörgen Gren, a senior EU official
involved in the initiative.
The commission said it would carry out detailed analysis to
decide by year-end whether new legislation is needed. Brussels
initially flagged the concerns of businesses about transparency on
platforms last May.
When tackling problems of transparency with search results, the
EU said it wouldn't necessarily require platforms to divulge the
inner-workings of their algorithms but that the topic would be
discussed as the commission conducts its analysis. The commission
will also explore whether paying providers are ranked higher in
search results than others, an EU official said.
Search rankings are at the heart of one of the cases by the
commission's competition directorate against Google, which Brussels
accuses of skewing results to preference its own comparison
shopping service over that of rivals. Google denies the
charges.
The plan to further scrutinize web platforms' operations comes
as part of the commission's midterm review of its Digital Single
Market project, through which the EU aims to translate its single
market in goods and services among its 28 member states into the
online space. The project entails more than a dozen legislative and
other initiatives, such as harmonizing the bloc's data protection
rules and ensuring consumers can shop across borders online.
The commission's deliberations highlight ongoing concerns in top
European policy circles about the power of U.S. technology
companies, which had sparked a flurry of investigations, including
the three separate EU antitrust probes into Google. Both Brussels
and national capitals are cracking down on how tech companies
operate here regarding issues such as data privacy, copyrights and
taxes.
At the same time, the commission is eager to promote small
businesses and entrepreneurs at a time when the bloc is still
suffering from a generally weak job market. Seeking to create jobs,
the commission has encouraged the growth of the so-called sharing
economy--platforms like Uber Technologies Inc. that link service
providers to consumers.
Associations representing large American tech companies said
they were dismayed by the commission's plans for platform
rules.
"We believe there's not enough of a basis for general
intervention and that the European Commission should use other
instruments when there's market failure," said James Waterworth,
vice president for Europe at the U.S.-based Computer &
Communications Industry Association, a lobby group that represents
Facebook Inc. and Google.
EDiMA, a European trade association representing online
platforms such as TripAdvisor and Apple Inc., said it was
"disappointed and astounded" at the announcement.
The EU on Wednesday said it would also in the coming months
publish guidance to encourage technology firms to more quickly
remove hate speech and extremist rhetoric from their platforms.
The commission says it has no plans to propose concrete
legislation in the area, but rather wants to clarify minimum
requirements for takedown procedures, such as whether a form of
acknowledgment of receipt by the platform is needed when a user
flags content.
Internet companies have faced increased pressure from
authorities to accelerate removal of terrorist content and hate
speech after a number of deadly terror attacks in Europe in recent
months.
The companies already try to remove illegal information when it
is reported, but face criticism they don't do so rapidly enough or
take enough of the content down. The tech firms say they are wary
of initiatives that infringe on freedom of expression.
Separately, the commission's competition directorate published
the findings of its two-year long probe into the e-commerce sector.
The EU reiterated warnings that consumer-product makers and digital
content owners could face antitrust probes for restricting the way
retailers sell the companies' goods online.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
May 10, 2017 10:32 ET (14:32 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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