Fighting in Brussels muddies Big Tech regulatory plans

A frank intervention in the European Parliament last month captured the frustrations that dull the EU’s attempts to curb the powers of big techs.

Last year, the EU unveiled sweeping tech regulation plans that would place heavy responsibilities on Google, Facebook and Amazon to clean up their platforms and ensure fair competition.

But since then, the package of measures has stalled in the European Parliament, and now risks being watered down and greatly delayed.

There are even fears in Brussels that the new rules will not be in place before Margrethe Vestager, the EU’s head of competition and digital policy, leaves her post in three years.

“It looked like we agreed, but we didn’t. . . at all. We are far from having a common position on this subject, ”said Evelyne Gebhardt, a German MEP, exasperated during the debate last month.

Slow progress is also giving Big Tech more time to fully grasp key sectors of the economy. “If we wait too long, some markets cannot be repaired. It is about protecting consumers and small businesses in Europe. We have to do it as quickly as possible, ”said a person directly involved in the parliamentary debate.

The two proposed bills are the Digital Markets Act (DMA), which aims to force so-called gatekeepers, like Google, to ensure a level playing field on their vast online platforms, and the Digital Services Act (DSA). , which clarifies Big Tech’s responsibilities for keeping illegal content out of their services.

But the package has divided MEPs on several fronts.

The biggest struggle is which companies should be regulated. Andreas Schwab, the main MEP representing the powerful EPP group in parliament, has pushed for legislation to focus only on the biggest platforms. But rivals want the legislation to be broader and target a number of digital services.

“If the threshold is too low, it would also capture a number of traditional businesses. But this law is not for the economy in general, but it is specifically aimed at the digital gatekeepers who shut down markets, ”Schwab told the Financial Times.

According to his proposals, only companies whose market value exceeds 80 billion euros would fall under the new laws. Schwab also wants to target only the core digital services of each business, for example, only targeting Google search and advertising activities.

But the Socialists and Democrats (S&D), the second largest political group in the European Parliament, want to include other types of digital services, such as video streaming, music streaming, mobile payments and cloud services.

“If we only tackle five companies, that won’t solve the problem,” said Dutch MEP Paul Tang, who said companies worth over 50 billion euros should be regulated. , a threshold that would also include the Dutch company, SAP and Airbnb in Germany.

“I’m afraid new guardians will rise up instantly once you deal with Google and the rest. We need the legislation to be future proof,” Tang said. “We’ve waited over 20 years. to reform the rules of the internet and therefore we will have to make it strong enough for the next 20 years. “

He also said his party believed the legislation should tackle platforms that offer more than one service because “otherwise big tech will get around the laws with their army of expensive lawyers and it will be a missed opportunity. “.

Schwab, who spoke out against Google’s business model, said that too broad a target would dilute the EU’s ability to tackle bigger issues. “We risk having a law that wants to cover everything and gets nowhere. If that happens, it will be a big win for Google and other big tech companies, ”he said.

The stalemate will not be resolved easily. “Everyone has a difficult position and no one is ready to budge and compromise,” said one person involved in the debate.

Some are hoping that a solution will emerge before EU states, the European Commission and Parliament meet for talks early next year, and before France, which holds the rotating presidency of the EU in 2022, heading towards presidential elections in April. A meeting last week between all political parties aimed to close some of the gaps.

Separately, MEPs are also fighting over the obligations to which large platforms should be subject. In line with the commission’s proposals, Schwab wants users to give their consent to whether their data can be combined between services, for example between Google’s Gmail and YouTube. Socialists want this practice to be banned.

The S&D is also pushing for the new rules to force Big Tech to prove that small business acquisitions don’t hurt the market or prevent them from buying smaller competitors, a move Schwab considers too extreme. He also wants a ban on the controversial practice of targeting users with ads, but Schwab opposes it.

Meanwhile, EU states are also competing to influence the outcome of the process. France wants individual states to have more power to impose fines on big tech companies if they don’t clean up their platforms. Ireland and Luxembourg, where several large tech companies are based, prefer the status quo.

Under current rules, only countries where large tech groups are headquartered have the power to impose heavy fines and force platforms to remove illegal content.

“This is the main battle on the DSA that risks derailing it,” said a person familiar with the negotiations.

Daily Bulletin

#techFT brings you news, commentary and analysis on the big companies, technologies and issues shaping this fast-paced industry from specialists around the world. Click here to receive #techFT in your inbox.

Comments are closed.