US tech giants face fines of 6-10% because the EU has enacted rules to contain their power

BRUSSELS (Reuters) – Amazon, Apple, Facebook and Alphabet unit Google may need to change their business practices in Europe or face hefty fines of between 6-10% under new draft EU rules announced Tuesday.

The rules are the 27-nation bloc’s most serious attempt to rein in the power of the US technology giants who manage vast amounts of data and online platforms that thousands of companies and millions of Europeans rely on.

They also highlight the European Commission’s frustration with its antitrust cases against the technology giants, notably Google, which critics say have failed to address the issue.

Regulatory oversight has increased from technology giants and their power worldwide.

European Competition Commissioner Margrethe Vestager and EU Internal Market Commissioner Thierry Breton will present the rules, not only to keep tech giants in check, but also to prevent the emergence of anti-competitive dominant companies.

A set of rules called the Digital Markets Act is calling for fines of up to 10% of annual revenue for online gatekeepers who break the new rules, a person familiar with the matter told Reuters.

It also includes a list of do’s and don’ts for gatekeepers, which will be classified based on criteria such as number of users, revenue and the number of markets they operate in, other sources said.

The second set of rules, known as the Digital Services Act, also targets very large online platforms, such as those with more than 45 million users.

They will need to do more to tackle illegal content on their platforms, misuse of their platforms that infringe fundamental rights and deliberate manipulation of platforms to influence elections and public health, among others.

The companies will also have to show details of political ads on their platforms and the parameters used by their algorithms to suggest and rank information.

The draft rules must be in line with the requirements of EU countries and EU legislators, some of which have pushed for stricter laws, while others are concerned about the over-scope of regulation and the impact on innovation.

Tech companies, which have called for proportionate and balanced laws, are expected to take advantage of this split to lobby for weaker rules, and the final draft is expected in the coming months or even years.

Reporting by Foo Yun Chee; Editing by David Gregorio


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