European ministers on Thursday green-lit their versions of two new, massive EU rulebooks to tame Big Tech and tackle illegal content online.
Economy ministers from across the bloc rubber-stamped common positions on the digital competition and content moderation laws known as the Digital Markets Act (DMA) and Digital Services Act (DSA), at a Competitiveness Council meeting in Brussels. The ministers’ approval paves the way for the EU Council and Parliament to hammer out final texts next year.
The regulatory crackdown comes after years of revelations of excesses and harmful practices on Big Tech’s online platforms, ranging from terrorist footage gone viral to massive sharing of child sexual abuse material and anti-competitive practices of some the most popular global platforms.
The new rules are also a key priority for policymakers in Paris. The French government takes over the presidency of the EU Council in January and is keen to clinch a final deal on the new laws ahead of the country’s presidential election in April.
“Today is a very important, almost historical day,” France’s Digital Minister Cédric O said ahead of Thursday’s discussion, calling the two draft laws “potentially the most important in the history of digital regulation, both when it comes to the economic side and content side.”
Presented by the Commission in December 2020, the legal texts lay out rules to force tech companies to better police content on their platforms and to boost digital competition by limiting the sprawling power of tech giants such as Google, Apple, Amazon, Facebook and Microsoft.
Companies that would violate the new laws could face fines of up to 10 percent of their global revenues.
The final version of the two texts could be adopted as early as the first half of 2022.
“We need these regulations and we have needed them for years now,” Denmark’s Minister of Industry Simon Kollerup told POLITICO ahead of the meeting. “It is an important milestone in democracy to be able to take back power for the future of the societies we live in.”
POLITICO breaks down what ministers will agree on at Thursday’s meeting.
Illegal content crackdown
The Digital Services Act is a revamped version of e-commerce rules drafted over twenty years ago. It will lay out rules for how internet players manage content — affecting everyone from small registrars managing websites’ names to massive social media firms like Facebook and online marketplaces like Amazon.
The aim is to crack down on child sexual abuse images, terrorist content and dangerous products but also to force online platforms to open up the black boxes of how their technology functions.
What’s new for Big Tech?
EU countries supported much of the Commission’s initial proposal but clarified some rules, including specifically mandating internet giants to disclose publicly how many staff are moderating content and the languages they speak. Recent revelations by Facebook whistleblower Frances Haugen highlighted the lack of resources the social media firm devotes to tackling harmful content in languages other than English.
Officials in Council also added some new ideas. One is to force Big Tech to take measures to protect children through age verification and parental controls; another to ban the use of misleading or manipulative design tricks — known as dark patterns — to nudge users to give their consent to be tracked on platforms to get personalized recommendation of content.
Capitals also bolstered a rule for tech companies to notify law enforcement of their suspicions of a criminal offense, expanding the rule to cloud companies, which host troves of images.
What’s in it for users?
Users of online platforms would also be given new rights, including that a platform should tell them if it restricted the visibility of certain posts or suspended monetary payments — a boon to influencers and online “creators” that make a living from social media posts on sites like TikTok and YouTube.
Online marketplaces such as Amazon, AliExpress and eBay would also be forced to invest more efforts to check who is selling goods on their platforms — a way to combat the spread of illegal and dangerous products online. Online buyers would get better access to redress.
Who will enforce the rules?
Countries’ most drastic change to the text has been to empower the European Commission to hold Big Tech accountable, rather than authorities in Ireland, the EU country where most of the Big Tech firms have their European headquarters. Many countries including France and Germany have been frustrated with Dublin over its enforcement of the bloc’s privacy law, known as the GDPR, against companies like Facebook.
When will this come into effect?
EU governments want to give tech companies a year and a half before the content moderation rulebook applies, instead of three months as initially proposed, meaning the DSA would be first applied in 2024 at the earliest.
More competition, please
The second part of ministers’ agreement is on the EU’s bid to rebalance the digital economy and temper the market power of platform giants under a new Digital Markets Act.
The bill would impose a series of prohibitions and obligations on so-called “gatekeeper” platforms — firms that hold a lot of market power in the digital economy like Google, Amazon, Facebook, Apple and Microsoft.
How will they be ‘reined in’?
These tech behemoths would be prohibited from combining personal data from different sources and bundle digital services. Users would also be granted the right to remove pre-installed apps on their devices.
What qualifies as a ‘gatekeeper’?
A major sticking point in upcoming negotiations with EU Parliament lawmakers will be how many other, smaller firms get caught up in the scope based on where the EU puts the threshold to call a company a “gatekeeper.”
The Commission wants the rules to cover firms with an annual turnover of at least €6.5 billion in the last three years in Europe and a market capitalization of at least €65 billion in the last financial year. A firm would also need to have more than 45 million monthly EU end-users and more than 10,000 yearly active business users in the EU to be considered a gatekeeper.
The French government, which will shepherd negotiations with the European Parliament on the plans in 2022, has favored that the rules target the largest players first and foremost.
The German government this week also called for the Digital Markets Act to focus on the “largest” gatekeepers, asking for the draft law’s definition to be further narrowed down, in a diplomatic note seen by POLITICO.
The Commission meanwhile has a dozen firms in mind that would fall under the new rules.
“Member states each have their own idea of how many firms will come under the scope,” one EU diplomat involved in the talks said. “We believe that there will be 11 companies that, as things stand, qualify as gatekeeper platforms.”
How does Washington feel?
Not very happy. Such a narrow definition could anger the U.S. government, however, because the rules may disproportionately impact U.S. companies when compared to other regions.
How does France feel?
The French government is confident about finding common ground between EU nations.
“There still work to do in terms of refining the names of the platforms,” France’s Digital Secretary Cedric O told POLITICO on the sidelines of Thursday’s Competitiveness Council.
“However there is a form of consensus for identifying the real gatekeepers,” he added.
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