EU proposes sweeping regulations on Big Tech, hefty fines for noncompliance
The European Commission on Tuesday introduced two new pieces of legislation that could implement much stricter regulations on tech giants in the European Union, and levy hefty fines for noncompliance.

Credit: WikiMedia
Those new rules are part of the Digital Markets Act and the Digital Services Act, both proposed by the EU's executive arm Tuesday. They're meant to curb the power of Big Tech in the EU and foster a more competitive environment for smaller companies, CNBC reported. The Digital Markets Act, for example, would implement changes that would end self-preferencing.
One example could be the end of Apple highlighting its own product options in an App Store search. Apple and Google could also be forced to allow users to remove apps that come preinstalled on a device. Performance metrics could also be shared with advertisers and publishers for free.
If tech giants don't comply with the new regulations, they could face stiff penalties. Some indications suggest that fines could be as high as 10% of a company's annual global turnover. The regulations could also force companies to divest if they systematically break the rules, though on EU official said that breaking up big tech companies would only become an option if there were "no other remedy" available.
The second piece of legislation, the Digital Services Act, is aimed at addressing illegal or harmful content by asking platforms to take them down in a prompt matter. Like the market-focused act, there would be hefty penalties for companies that fail to comply.
EU competition chief Margrethe Vestager on Tuesday said that the two acts would both ensure that users "have access to a wide choice of safe products and services online" and would allow businesses operating in Europe to "freely and fairly compete offline just as they do online."
Both proposals would still need to be approved by EU member governments and legislators, but policy experts told CNBC that adoption could be faster than usual.
The EU has been spearheading tech regulation, starting with the adoption of widespread data privacy laws in 2018 and continuing to new right to repair regulations in 2020.
Specific tech giants have also been a target of EU scrutiny. Amazon in November was hit by antitrust allegations in Europe, and the EU is currently investigating claims of anticompetitive behavior in Apple systems like Apple Pay and the App Store.
Vestager, although leading the EU's antitrust charge, has cautioned against the idea of breaking up Big Tech companies. In October, she said that governments "should be very careful with that type of remedy because one should be very sure how it would actually work."

Credit: WikiMedia
Those new rules are part of the Digital Markets Act and the Digital Services Act, both proposed by the EU's executive arm Tuesday. They're meant to curb the power of Big Tech in the EU and foster a more competitive environment for smaller companies, CNBC reported. The Digital Markets Act, for example, would implement changes that would end self-preferencing.
One example could be the end of Apple highlighting its own product options in an App Store search. Apple and Google could also be forced to allow users to remove apps that come preinstalled on a device. Performance metrics could also be shared with advertisers and publishers for free.
If tech giants don't comply with the new regulations, they could face stiff penalties. Some indications suggest that fines could be as high as 10% of a company's annual global turnover. The regulations could also force companies to divest if they systematically break the rules, though on EU official said that breaking up big tech companies would only become an option if there were "no other remedy" available.
The second piece of legislation, the Digital Services Act, is aimed at addressing illegal or harmful content by asking platforms to take them down in a prompt matter. Like the market-focused act, there would be hefty penalties for companies that fail to comply.
EU competition chief Margrethe Vestager on Tuesday said that the two acts would both ensure that users "have access to a wide choice of safe products and services online" and would allow businesses operating in Europe to "freely and fairly compete offline just as they do online."
Both proposals would still need to be approved by EU member governments and legislators, but policy experts told CNBC that adoption could be faster than usual.
The EU has been spearheading tech regulation, starting with the adoption of widespread data privacy laws in 2018 and continuing to new right to repair regulations in 2020.
Specific tech giants have also been a target of EU scrutiny. Amazon in November was hit by antitrust allegations in Europe, and the EU is currently investigating claims of anticompetitive behavior in Apple systems like Apple Pay and the App Store.
Vestager, although leading the EU's antitrust charge, has cautioned against the idea of breaking up Big Tech companies. In October, she said that governments "should be very careful with that type of remedy because one should be very sure how it would actually work."
Comments
I sincerely wish Apple would refuse to sell its products or services within the EU (I know they won’t), and would have done even if we hadn’t voted to leave, even to my own detriment.
When I download an app from the App Store I have almost no concern about the security of it. You can say you want the right to install whatever you want on your own device (although the operating system which makes your device work doesn’t belong to you...), but that’s an issue of principle with very little actual benefit, and certainly nothing that will make a big difference in the life of 99.99% of users.
—————-
I don’t understand how and why EU can fine these companies 10% of global revenue! Sure for 100% of the EU sale. But that company is not doing their global business with in EU. If EU just do whatever whatever they want, why not just force to move the company HQ to EU or take over control the company?
This is yet another barrier of entry for a new, upstart little company dressed up as the very opposite. A big company is able to absorb the additional regulatory burden of reporting more easily than a smaller company. Just yet another layer of regulation that favours corporatism.
If such legislation is judged necessary, it should be the job of the regulator to monitor for compliance to find the sinner, but that would require the euroweenies to get off their fat wine and cheese arses and get out to do real work. Investigate stuff.
And don’t get me started on this bit:
if there is one thing Big Government really, really hates, it’s the story of the little red hen.
US legislation like FATCA has been a huge headache for non-US companies for years now.
In this case I can think of a large number of super cool things I could do with my iPhone if Apple did not prevent me from doing them.
It is my choice to take the risk, not Apple's and certainly not yours.
Guess what, EU, companies like Google and Apple would simply quit serving the EU before they would pay a fine equal to 10% of their total gross revenue (or be "broken up"). Sure, they wouldn't like leaving that lucrative market--representing a significant chunk of global GDP, but if the alternative is walking on eggshells with catastrophic penalties?
To slightly exaggerate, would you keep your best customer if they threatened to punch you in the face if you don't comply with their changing whims? Not if you had other options, and these tech firms have other options.
The UK is looking like a good place to do business in this climate.
Edit: to be clear, I'm not predicting that Apple et al. will choose to stop doing business in the EU, but the EU regulators should appreciate that there are limits to what they can demand of these companies in the name of "the customer." The customers won't be too happy if they can't Google, Facebook, or buy an iPhone.
But the story itself is somewhat unclear. For example, does the requirement to "remove apps" also mean that the hardware vendor (Apple) must allow third parties to replace those removed apps? For example, the Apple App Store. If so, Apple needs to prepare for withdrawing from the EU market. If the EU can force Apple to allow other App Stores, and if Apple accedes, I will be so mad with Apple I will leave it for Android. There's no point in using iOS any more if its security isn't managed by Apple.
Does the EU want users to be above to remove free apps? Why? How is Apple making money and taking advantage of others by giving apps away for free? I don't get it.
That's flattering that you would remember what I wrote on another subject. Thanks. And I'm not being sarcastic.