EU unveils draft policies that would curb power of Big Tech firms

Photo (c) stockcam - Getty Images

Two pieces of legislation would require technology firms to comply with a new set of rules

The European Commission, the executive division of the European Union (EU), on Tuesday released two draft policies that would force major technology companies to change the way they operate or risk penalties.

A draft EU legislation called the Digital Services Act would require big social media companies and e-commerce platforms to remove illegal and harmful content from their platforms. 

A second proposal, called the Digital Markets Act, would require certain firms -- those who have ascended to a role of “gatekeeper” in the industry -- to comply with a list of a list of dos and don’ts in order to keep their power in check. For example, a company like Apple wouldn’t be allowed to rank its own products and services higher than others on its displays.

The new rules are meant to keep technology giants from unfairly stifling competition, said Margrethe Vestager, the EU commissioner leading the charge on tech issues.

"The two proposals serve one purpose: to make sure that we, as users, have access to a wide choice of safe products and services online. And that businesses operating in Europe can freely and fairly compete online just as they do offline," Vestager said in a statement.

"The important thing here is with size comes responsibility," she said.

Steep fines or breakups

Firms that don’t heed the rules could face fines of up to 10 percent of their global annual revenues. In cases where rules are breached systematically, companies could be required to sell parts of their business. 

The proposals, which could take years to enact, are expected to receive pushback from the companies that would be subjected to the new rules.

"While we will review the Commission's proposals carefully over the coming days, we are concerned that they appear to specifically target a handful of companies and make it harder to develop new products to support small businesses in Europe," Karan Bhatia, Google's vice president of government affairs and public policy, said in a statement.

Facebook, on the other hand, said it believes the EU proposals are "on the right track to help preserve what is good about the internet."

Take an Identity Theft Quiz. Get matched with an Authorized Partner.