Facebook, Amazon, Google and others could soon face massive fines in the European Union under a draft law that seeks to reign in tech giants.
The European Union is set to unveil landmark legislation that lays out strict rules for tech giants to do business in the bloc, according to several media reports on Monday.
The draft legislation, dubbed the Digital Services Act and the Digital Markets Act, outlines specific regulations that seeks to limit the power of global internet firms on the EU market.
Companies including Google, Apple, Amazon, Facebook and others could face hefty penalties for violating the rules.
The landmark draft law is set to be presented on Tuesday.
What is in the draft law?
The draft law sets out a list of do's, don'ts and penalties for internet giants, EU sources told news agencies Reuters and AFP.
- Firms could be fined up to 10% of their annual turnover for violating competition rules.
- Tech giants could be entirely banned from the EU market over "serious and repeated breaches of law," AFP reported.
- Large tech firms would be designated as internet "gatekeepers" — making them subject to stricter regulations.
- Companies would need to inform the EU ahead of any planned mergers or acquisitions.
- Certain kinds of data must be shared with regulators and rivals.
- Companies favoring their own services could be outlawed.
Regulators tackling Big Tech
European and US regulators have grown increasingly concerned over the business and user data practices of tech giants — particularly firms buying other companies in a bid to eliminate potential rivals.
Some recent examples include Facebook's acquisition of messaging service WhatsApp and the social media giant Instagram. Google's purchase of YouTube and GPS navigator Waze also raised alarm among regulators.
Facebook and other firms have warned that the more regulation could prompt the company to move away from Europe, which could cost jobs and block access to its site for EU users.
Last week, the US Federal Trade Commission (FTC) and 48 states filed antitrust lawsuits against Facebook. The FTC also filed a separate lawsuit to force Facebook to sell off Instagram and WhatsApp.
In November, the EU charged Amazon with breaking its competition law.
What happens next?
EU antitrust czar Margrethe Vestager and EU digital chief Thierry Breton were due to present the draft legislation on Tuesday.
The text can still be changed before then, so it remains to be seen which rules will make the final cut.
The main goal of the legislation is to update the bloc's outdated legislation from 2004.
The draft still faces a long ratification process — including feedback from the EU's 27-member states and the European Parliament. Company lobbyists and trade associations will also influence the final law.
rs/rc (AFP, Reuters)
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