EU agrees on new digital rules to rein in Big Tech dominance

Mar 25, 2022, 4:54 AM | Updated: Mar 29, 2022, 4:39 pm

BRUSSELS (AP) — The European Union set the stage for a stepped-up crackdown on big tech companies with an agreement on landmark digital rules to rein in online “gatekeepers” such as Google and Facebook parent Meta.

EU officials agreed late Thursday on wording for the bloc’s Digital Markets Act, part of a long-awaited overhaul of its digital rulebook. The act, which still needs other approvals, seeks to prevent tech giants from dominating digital markets, with the threat of whopping fines or even the possibility of a company breakup.

For instance, they face tighter restrictions on using people’s data for targeted online ads — a primary source of revenue for Google and Facebook — while different messaging services or social media platforms would be required to work together.

The new rules underscore how Europe has become a global pacesetter in efforts to curb the power of tech companies through an onslaught of antitrust investigations, stringent regulations on data privacy and proposed rules for areas like artificial intelligence.

“What we have been deciding about yesterday will start a new era in tech regulation,” the European Union’s lead lawmaker Andreas Schwab, said at a press conference Friday.

The same day, however, the European Union reached a preliminary agreement with the U.S. that paves the way for Europeans’ personal data to be stored in the U.S.

In its crackdown on tech giants, the EU also has another set of rules, the Digital Services Act, that aim to ensure online safety for users through stricter requirements to flag and remove harmful or illegal content or services like hate speech and counterfeit goods. Both are expected to take effect by October, EU competition chief Margrethe Vestager said.

The European Consumer Organisation, or BEUC, welcomed the agreement on the Digital Markets Act, saying it would help consumers by creating fairer and more competitive digital markets. Digital rights group EDRi said it will “narrow the power imbalance between people and online platforms.”

Tech companies were less enthusiastic.

Apple said it was concerned that parts of the Digital Markets Act “will create unnecessary privacy and security vulnerabilities for our users while others will prohibit us from charging for intellectual property in which we invest a great deal.”

Google said it will study the text and work with regulators to implement it.

“While we support many of the DMA’s ambitions around consumer choice and interoperability, we remain concerned that some of the rules could reduce innovation and the choice available to Europeans,” the company said.

Amazon said it is reviewing what the rules mean for its customers. Meta, which also owns Instagram and WhatsApp, didn’t reply to a request for comment.

The Digital Markets Act includes a number of eye-catching, groundbreaking measures that could shake up the way big tech companies operate.

They wouldn’t be allowed to rank their own products or services higher than those of others in search results. That means Amazon, for example, wouldn’t be allowed to list its own brand of goods ahead of rival offerings from independent merchants.

Essential software or apps such as web browsers can’t be installed by default along with the operating system, in the same way Google’s Chrome comes bundled with Android phones. There’s also a measure aimed at loosening Apple’s stranglehold on iPhone apps through its App Store.

A user’s personal data also couldn’t be combined for targeted ads unless “explicit consent” is given. That would prevent Google from collecting information on YouTube viewing, online searches, travel history from Maps and Gmail conversations to build a profile to serve up personalized ads, unless users agree to each one.

Messaging services and social media platforms must work with each other to avoid the domination of a few companies that have already established big networks of users. That opens up the possibility, for example, of Telegram or Signal users being able to exchange messages with WhatsApp users.

Online services would have to ensure that users can opt out just as easily as they can sign up.

That’s “aimed at services where it’s super easy to sign up — boom, you’re a customer — but unsubscribe is hidden under three levels of menus,” such as Amazon Prime, said Jan Penfrat, senior policy adviser at EDRi. “They push it on to you with big, colorful buttons, but getting out of it is really difficult.”

Criteria for defining a gatekeeper under the rules have been tweaked to include companies that earn at least 7.5 billion euros ($8.3 billion) in annual revenue in Europe in the past three years, have a market value of 75 billion euros, provide services in at least three EU countries, and have 45 million users and 10,000 business users each year in the bloc.

Violations could be punished with whopping fines: up to 10% of a company’s annual income. Repeat offenders could be fined up to 20% of worldwide revenue, which could amount to billions of dollars for wealthy Silicon Valley companies.

Negotiators from the European Parliament and European Council, which represents the 27 EU member countries, reached the deal after months of talks. It now needs to be endorsed by the Council and the European Parliament.

___

Chan reported from London. Follow him on Twitter at https://www.twitter.com/chanman.

___

See all of AP’s tech coverage at https://apnews.com/hub/technology.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

This photo provided by Robert Wilkes, owner of a house boat management company, shows smoke rising ...

Associated Press

Houseboats catch fire while docked at Wahweap Marina on Lake Powell

More than half a dozen house boats momentarily caught fire at a popular boating destination on the Utah-Arizona line on Friday.

21 hours ago

File - Women work in a restaurant kitchen in Chicago, Thursday, March 23, 2023. On Friday, the U.S....

Associated Press

US hiring, unemployment jump in May and what that says about the economy

The nation’s employers stepped up their hiring in May, adding a robust 339,000 jobs, well above expectations.

21 hours ago

(Pixabay Photo)...

Associated Press

Oath Keeper from Arizona sentenced for role in Jan. 6 riot at US Capitol

Edward Vallejo, a U.S. Army veteran from Phoenix, oversaw a “Quick Reaction Force” at a Virginia hotel that was prepared to deploy an arsenal of weapons into Washington if needed, authorities say.

2 days ago

FILE - U.S. Border Patrol Chief Raul Ortiz listens during a news conference, Jan. 5, 2023, in Washi...

Associated Press

US Border Patrol chief is retiring after seeing through end of Title 42 immigration restrictions

The head of the U.S. Border Patrol announced Tuesday that he was retiring, after seeing through a major policy shift that seeks to clamp down on illegal crossings at the U.S.-Mexico border following the end of Title 42 pandemic restrictions.

3 days ago

FILE - President Joe Biden talks with House Speaker Kevin McCarthy of Calif., on the House steps as...

Associated Press

House OKs debt ceiling bill to avoid default, sends Biden-McCarthy deal to Senate

The House approved a debt ceiling and budget cuts package late Wednesday, as President Joe Biden and Speaker Kevin McCarthy assembled a bipartisan coalition of centrist Democrats and Republicans against fierce conservative blowback and progressive dissent.

3 days ago

Sean Bickings (Family Photo via city of Tempe)...

Associated Press

Family of man who drowned last year in Tempe Town Lake files wrongful death lawsuit

The family of a man who drowned in Tempe Town Lake a year ago filed a wrongful death lawsuit against the city Wednesday, noting that its police department doesn't have a policy requiring officers to go into the water to save someone.

3 days ago

Sponsored Articles

...

DAY & NIGHT AIR CONDITIONING, HEATING AND PLUMBING

Here are the biggest tips to keep your AC bill low this summer

PHOENIX — In Arizona during the summer, having a working air conditioning unit is not just a pleasure, but a necessity. No one wants to walk from their sweltering car just to continue to be hot in their home. As the triple digits hit around the Valley and are here to stay, your AC bill […]

(Photo: OCD & Anxiety Treatment Center)...

OCD & Anxiety Treatment Center

Here’s what you need to know about OCD and where to find help

It's fair to say that most people know what obsessive-compulsive spectrum disorders generally are, but there's a lot more information than meets the eye about a mental health diagnosis that affects about one in every 100 adults in the United States.

(Photo by Michael Matthey/picture alliance via Getty Images)...

Cox Communications

Valley Boys & Girls Club uses esports to help kids make healthy choices

KTAR’s Community Spotlight focuses on the Boys & Girls Club of the Valley and the work to incorporate esports into children's lives.

EU agrees on new digital rules to rein in Big Tech dominance