European Union targets tech giants with new tax and content rules
The European Union is planning to apply more restrictions on the activities and responsibilities of Apple and other major tech companies, EU digital policy and antitrust chief Margrethe Vestager has revealed, which could impact taxes, privacy, and online content.
Margrethe Vestager, Executive Vice-President of the European Commission
In its continuing attempts to rein in the power and influence of tech giants including Apple, Google, Facebook, and Amazon, the European Commission is introducing proposals intended to affect their activities. EU official Vestager hopes to use the proposals to fundamentally change the responsibilities of the companies, which in theory will go further than current laws currently cover.
"It's a full complex of things. It's not done with just one piece of legislation," said Vestager in an interview attended by the Wall Street Journal. "After the first mandate and the first specific competition cases, what I have seen very clearly is that we need rigorous competition-law enforcement, but we also need regulation."
The initiatives cover a number of areas, and have been outlined over the last few weeks by the EU and the European Commission. In early July, Vestager detailed three of the areas that are anticipated to be affected by new legislation, that are likely to be presented to the European Parliament before the end of 2020.
The Digital Service Act was made at a time "when no one could have foreseen the situation we're in today," said the competition chief, "that platforms would not just be channels, but full ecosystems where a lot of what is ongoing and monetized by the platform itself."
Current rules insulate platforms like social media networks from being sued for controversial or deceitful content, but the situation has led to tech firms being slow to moderate user content. There have been suggestions of scaling back protections by lawmakers in both the EU and the United States to curtail misinformation, with the rules thought to be the EU's answer to the problem.
Rather than demanding platforms suddenly become liable for content or fake goods put up for sale, Vestager suggests the rules would allow for the creation of redress mechanisms for removed content.
As part of the same measures, companies operating such platforms would have to establish themselves as business entities within Europe to allow them to be "governed by these sets of rules," adds Vestager.
Apple has already passed comment on the Digital Services Act proposals, suggesting the "limited liability regime has helped deliver choice and innovation," but simultaneously advising for any new rules to be flexible in nature. "What makes sense for public-facing, content-sharing platforms may not be appropriate or technically feasible for services used to facilitate private communications or storage," Apple continued.
The Commission is currently running a pair of probes investigating Apple, specifically covering Apple Pay and the App Store, with the latter particularly looking into whether Apple has created a "gatekeeper" role for itself.
According to Vestager, such a digital tax that affects Apple and other large-scale multinational tech firms is justified because it is fair.
"So many businesses have to work very hard to make a profit, and from that profit to then pay taxes," Vestager suggested. "They should not be met with competitors for capital, skilled employees and customers who do not contribute to society. That has nothing to do with where you come from, it has to do with doing business in an equal manner."
Margrethe Vestager, Executive Vice-President of the European Commission
In its continuing attempts to rein in the power and influence of tech giants including Apple, Google, Facebook, and Amazon, the European Commission is introducing proposals intended to affect their activities. EU official Vestager hopes to use the proposals to fundamentally change the responsibilities of the companies, which in theory will go further than current laws currently cover.
"It's a full complex of things. It's not done with just one piece of legislation," said Vestager in an interview attended by the Wall Street Journal. "After the first mandate and the first specific competition cases, what I have seen very clearly is that we need rigorous competition-law enforcement, but we also need regulation."
The initiatives cover a number of areas, and have been outlined over the last few weeks by the EU and the European Commission. In early July, Vestager detailed three of the areas that are anticipated to be affected by new legislation, that are likely to be presented to the European Parliament before the end of 2020.
Content Moderation
One of the areas is to determine what the responsibilities of tech companies are regarding content posted by users. Currently under public consultation, the changes to the current Digital Services Act would update rules initially determined in 2000, which Vestager believes are already out of date.The Digital Service Act was made at a time "when no one could have foreseen the situation we're in today," said the competition chief, "that platforms would not just be channels, but full ecosystems where a lot of what is ongoing and monetized by the platform itself."
Current rules insulate platforms like social media networks from being sued for controversial or deceitful content, but the situation has led to tech firms being slow to moderate user content. There have been suggestions of scaling back protections by lawmakers in both the EU and the United States to curtail misinformation, with the rules thought to be the EU's answer to the problem.
Rather than demanding platforms suddenly become liable for content or fake goods put up for sale, Vestager suggests the rules would allow for the creation of redress mechanisms for removed content.
As part of the same measures, companies operating such platforms would have to establish themselves as business entities within Europe to allow them to be "governed by these sets of rules," adds Vestager.
Apple has already passed comment on the Digital Services Act proposals, suggesting the "limited liability regime has helped deliver choice and innovation," but simultaneously advising for any new rules to be flexible in nature. "What makes sense for public-facing, content-sharing platforms may not be appropriate or technically feasible for services used to facilitate private communications or storage," Apple continued.
Competition
For competition, Vestager claims she wanted to have enhanced investigative powers to order companies within a sector to change how they behave, with a view to curbing monopolies and to "prevent new gatekeepers from arising." Legislation proposals also include measures to prevent major firms from crushing smaller competitors in the same market, an initiative inspired by a trio of antitrust cases laid against Google.The Commission is currently running a pair of probes investigating Apple, specifically covering Apple Pay and the App Store, with the latter particularly looking into whether Apple has created a "gatekeeper" role for itself.
Digital Taxes
Another controversial element is digital taxation, which the EU is preparing to proceed with despite a disagreement with US lawmakers over the matter. The Commission advised it would do so as it had repeatedly warned its own tax measures would be proposed if international discussions failed before the end of 2020.According to Vestager, such a digital tax that affects Apple and other large-scale multinational tech firms is justified because it is fair.
"So many businesses have to work very hard to make a profit, and from that profit to then pay taxes," Vestager suggested. "They should not be met with competitors for capital, skilled employees and customers who do not contribute to society. That has nothing to do with where you come from, it has to do with doing business in an equal manner."
Comments
This is a horrible attempt to apply EU policies world wide. There is absolutely nothing good about this drive to extend control over thought and to grab "taxes" form companies that are not even in your country. Given the tools, government will use them in the most hideous ways possible.
The EU is saying sort yourselves out or we are going to drive for wildly draconian measures
the EU don’t really want to impose all that rubbish. But unless they force the issue like this, nothing will even change slightly
I also "chuckled" at the false equivocation.
Trump will rattle his blowhard garbage mouth with threats, lies and his stupidity. The companies would be better off if he kept his big fat mouth shut. As they should, the EU will ignore him. They will negotiate with all of them and settle on a tax and competition scheme. The tech giants really don't have a choice.
Google, Apple, Microsoft, Facebook ... they brought it on by themselves with their arrogance. The handwriting has been on the wall for quite awhile and they chose to do almost nothing so now their backs will be up against the wall very, very soon.
Primary offenders are Google and Facebook. At this point I don't know anyone, including most Americans, would wouldn't like to see those two get their comeuppance.
Zuckerberg's refusal to be responsible in any aspect of their business is the ultimate statement of arrogance
"Control over thought?" How are they trying to do that? Give me a break dude.
"Grab taxes from companies that are not even in your country?"Are you serious? Everyone of the EU's target does billions of dollars of business in these EU countries. By your logic no company should pay any taxes to anyone but the country where the company is headquartered. Do you have any idea how stupid that sounds or how utterly ridiculous that is? Are you aware America has all kinds of taxes that are exclusively applied to foreign companies?
It’s literally a paragraph dedicated to taxing technology companies with a quote from a representative of the EU (Vestager) saying that hard working, tax paying companies should not be met with competitors for “capital, skilled employees and customers who do not contribute to society.” I didn’t invent that line, it’s right there in the article.
The implication is that by not paying a fair tax that these companies are not contributing to society. I disagree. How many people in the EU are employees of Apple? I would venture to guess there are thousands. I believe that Apple providing jobs is contributing to society.
Apparently you interpret her words differently than I do.
Not if I was a reasonably informed person (which, I expect, you are), and say, had a high school education (which, I expect, you have).
Until people will think that society has to serve economy and not economy to society we will be in big misery. Until individual profit will be put above society benefit. Until blind glorification of innovation will be proposed over responsibility and global well being.
I would laugh seeing how hysterically would US and Americans reacted when some big foreign company would sell digital content in US without paying hefty taxes. If they would be allowed at all.
Of course I can be wrong...
They are Freeloaders. Call it what you will or infer what you will, they are freeloading.