EU threatens to break up tech giants under sweeping new proposals

Big tech companies are facing further break-up threats as part of sweeping new compliance rules regarding content and competition regulation unveiled by the European Commission on Tuesday. 

“The two proposals serve one purpose: to make sure that we, as users, have access to a wide choice of safe products and services online. And that businesses operating in Europe can freely and fairly compete online just as they do offline,” Margrethe Vestager, the EU commissioner leading the charge on tech, said in a statement. 

“This is one world. We should be able to do our shopping in a safe manner and trust the news we read. Because what is illegal offline is equally illegal online,” Vestager added.

If tech giants don’t comply with the new competition rules, proposed under the Digital Markets Act, they can face fines of up to 10 percent of their total worldwide annual turnover or be forced to sell off portions of their businesses. Businesses that don’t comply with the content rules, proposed under the Digital Services Act, can face fines of up to 6 percent of their global revenues. 

The Digital Services Act would introduce a series of new, EU-wide obligations for companies to remove harmful and illegal content. The obligations would include imposing rules around the removal of illegal goods and content, introducing safeguards for users whose content has been deleted by platforms and creating transparency measures in online advertising and algorithms used to recommend content to users. 

The Digital Market Acts focuses on platforms acting as digital “gatekeepers” to the single market. The commission said “gatekeepers” are platforms that have a significant impact on the internal market and serve as “an important gateway” for business users to reach customers. 

The Digital Market Act would establish a series of obligations for gatekeepers to implement to ensure “fair and open digital markets,” the commission said. The proposed rules include limiting companies from blocking users from uninstalling pre-installed apps and prohibiting companies from using data obtained from business users in order to compete with those businesses, according to the commission. 

The proposed rules will be discussed by the European Parliament and member states, but it could take years to enact and they may face calls for major changes. 

The proposals add to the growing pressure facing tech giants. 

The Federal Trade Commission (FTC) and 48 attorneys general in the United States filed separate lawsuits against Facebook last week accusing the social media giant of anti-competitive acquisitions.

The Justice Department, joined by a growing number of states, has also charged Google with illegally maintaining a monopoly on search and search advertising. 

Both Google and Facebook have defended themselves against the antitrust allegations. 

Facebook called it a “revisionist history,” emphasizing that its acquisitions of WhatsApp and Instagram that are targeted in the lawsuits were approved by regulators at the time. 

Google has rejected the case’s claims as “deeply flawed,” arguing it has faced plenty of competition in the search market.