By Valentina Pop in Brussels and Sam Schechner in Paris
The European Union plans to introduce in coming weeks new
proposals aimed at changing behavior -- and, in some cases,
business models -- at large online platforms, reasserting the
bloc's role as global tech cop.
The European Commission, the bloc's executive arm, is completing
regulatory plans outlining how online platforms should remove
illegal content quickly and refrain from using their power to quash
rivals or push their own products on their sites. The commission
plans sanctions for violators that include fines and possible
separation of assets, according to people familiar with the
Under the plans, the bigger and more influential a company --
based on criteria including market share and revenue -- the more
obligations it will shoulder. The rules, though not targeting any
specific company, are likely to apply to U.S. tech companies
including Alphabet Inc.'s Google, Facebook Inc. and Amazon.com
Inc., according to EU officials.
In response to the coming regulations, tech companies and
industry groups have warned against creating a new set of
competition rules that could hobble innovation.
"We're at risk of limiting entire ecosystems because of concerns
that a handful of U.S. companies have gotten too big," said Kayvan
Hazemi-Jebelli, competition and regulatory counsel for the Computer
& Communications Industry Association, a lobbying group that
represents companies including Amazon, Facebook and Google.
The new proposals are slated for presentation by mid-December
and will be subject to negotiations with national governments and
the European Parliament before coming into force, in a process that
could stretch to several years.
A Facebook spokesman pointed to the company's prior comments
during the EU's public consultations about some of the legislative
proposals. In September, Facebook said it favored preserving the
current rules and that any changes shouldn't make companies liable
for removing content before it is flagged.
In a blog post Wednesday about the EU's regulatory plans, Xavier
Garambois, Amazon's vice president for EU retail, said that the
bloc should ensure "the same rules apply to all companies." An
Amazon-funded research paper Friday also echoed the lobbying
group's comments that the EU proposals could hurt innovation.
Apple Inc. declined to comment, and Google didn't immediately
Google, in its own September submission, said the EU should
refrain from blurring the line between illegal content and content
that is legal but potentially harmful "through backdoor regulation
of amorphously-defined harms."
Apple, in a late-June submission on potential new EU rules for
large platforms, said any law should account for the "diversity of
platforms' business models," noting that different companies that
could fall under such rules "are active in fundamentally different
markets and monetize their services in very different ways."
The EU regulatory push comes on the back of similar discussions
in the U.S., where a Democrat-led panel in the House of
Representatives recently recommended curbing platforms' alleged
abuse of market dominance and as Republicans and Democrats are
increasingly considering making social media more liable for their
The U.K., which is transitioning out of the EU, last week
announced plans to create a dedicated unit within its competition
authority to govern the behavior of dominant online platforms. The
new unit will begin work in April and could block decisions by tech
giants, order remedies and impose fines in case of
European Commission Executive Vice-President Margrethe Vestager
said in a recent interview that the new rulebook is necessary
because of the power online platforms are gaining in society and
the need to enforce European values in how they run their
"It's fair to say that if you have market access, we should set
the rules of how those markets work," she said. "It cannot be that
there are autocratic regimes that decide, or that it is in company
boardrooms where decisions are made. This is the moment for our
democracy to catch up."
Among the requirements will be an obligation to ensure that data
gathered on the platform isn't used to drive out competitors and
that platforms don't use algorithms to push their own services to
the detriment of their competitors.
Ms. Vestager recently filed formal charges against Amazon
alleging that sort of abuse, after three separate probes into
Google ended with fines of more than $9 billion in recent years for
similar behavior. Both companies deny any wrongdoing.
Ms. Vestager has spent the past six years probing Google,
Amazon, Facebook and Apple. Her pursuits have resulted in fines and
changes to the industry's business practices. In parallel, the EU
has implemented new data-protection rules that have led to a spate
of investigations from the bloc's national privacy regulators into
large tech companies, and may force such companies to stop sending
data about EU residents to U.S. soil.
Under the new proposals, Ms. Vestager will also have the power
to investigate and impose remedies on an entire market, not just
individual companies, as it is currently the case.
"The point of being able to do market investigations and impose
remedies is for that market to stay open," she said. "Otherwise the
risk is that as more markets become digital, more and more markets
would be prone to be monopolized."
The EU also plans to harmonize rules on how to police illegal
and harmful content online, after some EU countries, including
Germany, have adopted national obligations for illegal content to
be removed within 24 hours. The EU proposals will also seek to set
up recourse mechanisms for people or companies to be able to
challenge those takedowns.
The proposed new EU law will clarify what is illegal and seek to
streamline the definition of harmful and untrue content, while
preserving freedom of expression.
While obligations regarding illegal content will be punishable
with fines, the rules on disinformation will continue to be mainly
voluntary, but the EU is also moving toward regulation in this area
in coming years, EU officials say.
The enforcement and fines will stay in the hands of national
authorities, but the European Commission will seek to coordinate
among national enforcement agencies and carry out regular audits
into how the sector complies, said internal market commissioner
Online platforms will also be obliged to be more transparent
about their content-ranking algorithms. When used to boost content
that attracts the most clicks and engagement, to maximize revenue,
such algorithms can also end up accelerating the spread of hate
speech or baseless allegations.
The proposals may give the bloc the ability to break up a
company that is a frequent violator, but legal experts and Ms.
Vestager have said that they doubt the EU would be in a position to
use that power.
Write to Valentina Pop at firstname.lastname@example.org and Sam
Schechner at email@example.com
(END) Dow Jones Newswires
December 03, 2020 05:44 ET (10:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.