Technology giants are facing new rules in Europe, backed by huge fines

The bills do not mention any specific companies, but, as drafted, it is likely that one or both will apply to several large U.S. technology companies, such as Alphabet. Inc

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Google, Amazon.com Inc.

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Apple Inc. and Facebook.

At the same time, the UK, which has left the bloc, said on Tuesday that it was moving forward with similar legislation covering what it calls Online Harms. It would create a duty of care that would force social media companies and search engines to take action to prevent the distribution of illegal or potentially harmful material on their platforms or face fines of up to 10% of revenue. annual world championships.

This happens when the UK is also pursuing new competition rules for dominant online platforms, including the powers for a new digital marketing unit from its competition regulator to suspend, block or reverse the decisions of tech giants and impose fines. in case of non-compliance.

Taken together, the two legislative branches represent the greatest potential expansion of global technology regulation in recent years. Its goal is to update the laws of decades ago that have largely protected technology companies from responsibility for what their online users do. They would also create a new set of competition rules for a group of digital giants accused of exercising control of digital markets to consolidate their own positions and eliminate competitors.

The pair of EU proposals will now start months or years of racing on their scope and details, similar to the four years of debate leading up to the EU’s approval of the bloc’s privacy law in 2016, the General Regulation data protection or GDPR. All bills must be approved both by the European Council, which represents the bloc’s 27 national governments, and by the European Parliament directly elected to become law.

Technology companies reacted cautiously to new proposals, which could still be reformed or undone. Earlier, some warned against creating a new set of competition rules that could hinder innovation or heavy content moderation obligations that could push companies to remove legal content, stifling free expression.

But Facebook, which has complained about harsh content moderation rules in Germany, said on Tuesday it welcomed harmonization of EU rules on the issue. The proposals “are on track to help preserve what’s good on the Internet,” Facebook said

An Amazon spokesman declined to comment, but noted a blog post in which the company said the blog should ensure that “the same rules apply to all businesses.”

“We hope that future negotiations will try to make the EU a leader in digital innovation, not just digital regulation,” said Christian Borggreen, vice-president and head of the Brussels office of the Communications Industry Association. and Computers, which represents companies such as Amazon, Facebook and Google.

One of the victories of technology companies and their lobbyists is that the EU proposal keeps intact – at least for now – the basic shield of responsibility that protects digital intermediaries from responsibility for the content of their services and services. good faith efforts to solve problems. But the proposals add layers of growing obligations for online intermediaries, depending on their role in the digital ecosystem and the number of customers.

European legislative proposals provide a counterpoint to similar discussions in the United States, where the similar liability shield of the Internet industry — section 230 of the Communications Decency Act — faces a possible revision. But the prospects for a review of competition law in Washington remain unclear. In October, a group led by Democrats in the House of Representatives suggested several legislative changes to curb the power of large technology platforms.

Separately, the federal government has filed two major antitrust lawsuits in recent months against Google and Facebook Inc.

One of the two bills proposed by the EU, the Digital Services Act, would require large technology platforms that reach more than 10% of the EU population to actively seek out and mitigate the risks arising from illegal content and assets. available through their services. It requires annual external audits and imposes new transparency requirements on users and regulators.

Large platforms could be ordered to change their behavior after these audits and, if they do not comply, they could receive significant fines, with a maximum higher than EU GDPR privacy legislation.

The digital services law would also authorize regulators to enforce local laws on illegal content. A city that requires home rental registration could, for example, ask a home-sharing app to remove the listing of an unregistered home or ask for information about a non-tax-paying host, a U.S. housing official said. EU in a presentation on the Law.

The other EU bill, the Digital Markets Act, would prevent companies with a large number of business customers and consumers from being blacklisted as anti-competitive actions, such as forcing a company wishing to access a basic platform service to subscribe or pay for another such service. The law would also create other obligations towards smaller businesses and end users, such as providing price transparency to online advertisers and allowing data portability to end users.

Pressure groups are preparing to fight for the bills.

The Internet Society, a non-profit organization that promotes open Internet, said it was concerned that proposals, if enacted, could contribute to the internet fracture by dividing sites with different rules, said senior director Konstantinos Komaitis.

“The Internet will not die in one fell swoop. He is going to die of 1,000 cuts, ”he said.

But some other groups say more regulation needs to be done for big tech companies. Raegan MacDonald, head of public policy for Mozilla, the non-profit organization behind the Firefox web browser, said he supports new provisions on transparency of online advertising for Internet users in the content bill.

BEUC, an umbrella organization for European consumer rights groups, said new competition rules on the digital markets bill should help rebalance the digital market.

“Competition investigations may be too slow to prevent irreparable damage to the market,” said Monique Goyens, the group’s CEO. “It’s the right measure to ban some practices up front instead of picking up the pieces afterwards.”

—Stu Woo contributed to this article.

Write to Sam Schechner to [email protected]