If a tech company goes wrong repeatedly, the European Commission has the option to break up the company. This is stated in a bill that the committee has published.
It is part of a comprehensive plan with which Brussels wants to regulate the tech sector more firmly. The proposals are packed together in the so-called Digital Market Act and Digital Services Act.
Details about this second package have already leaked to the NOS, among others. The focus of this is, among other things, on the responsibility of platforms to combat unwanted content and products and to give users more insight into, for example, the algorithms of the platforms.
The other package is more focused on the business economic effects. The legislation focuses specifically on what the committee calls ‘gatekeepers’. “These are platforms that have a significant impact on the European market and are an important gateway for companies to reach customers.”
They are not mentioned by name, but everything indicates that it concerns parties such as Apple, Facebook, Google and Amazon. In recent years, Google has already been fined three by the European Commission. Several official investigations have been announced against Apple and Amazon.
A company that makes mistakes can soon be fined up to 10 percent of its annual turnover. That’s billions of dollars in the case of the major US tech companies. Anyone who makes repeated mistakes in the future runs the risk of being broken up. This option is, however, included in the proposal with considerable effort: this should only be an option if there is no other solution. So the question is whether it will ever come to that.
Not a power tool
According to Hans Vedder, professor of competition law at the University of Groningen, the European Commission may decide to break up the companies. “But they have no power to enforce it.” At the same time, the EU is an important market for the platforms and they have an interest in complying with the rules, Vedder thinks.
The so-called gatekeepers must also take measures to ensure that software from third parties (or competitors) runs properly on their own platform or operating system and can work together with it. Users must also always be able to remove pre-installed software on, for example, a telephone or laptop.
The proposals are the start of what is likely to be long and complex negotiations. The interests are great, especially for the tech companies. They are keen to water down legislation where possible. It is expected that it may take up to two or three years for the laws to actually be in place.
This immediately creates another tension: tech companies are known for acting very quickly and adjusting their behavior where necessary. It is therefore taken into account that platforms will gradually make changes to their policy to meet the criticism in Brussels.
Dutch MEPs welcome the legislative proposals, but are also critical. For example, according to the VVD, it must be prevented that the rules impede future innovations. GroenLinks parliamentarian Kim van Sparrentak calls it “positive” that the option of breaking up is included, but according to the group, this could have been done more clearly. State Secretary Mona Keijzer says that the proposals “tie in well with the Dutch position”.
Google says it fears that the rules are too focused on a handful of companies and that this makes it more difficult to develop new services for smaller companies. Facebook, remarkably, stresses that it hopes the rules will also set limits on what Apple is allowed to do. The company feels that the phone and PC builder with the App Store has too much power.