EU Laws to control the online giants. An explainer
They are meant to limit the power and dominance of the world’s big tech companies by increasing competition and putting pressure on big tech to fight fake news and disinformation better. Two major EU laws are on their way to becoming reality: The European Digital Markets and the Digital Services Acts.
During the first half of 2022, negotiations between governments in the European Council will start, interestingly enough under French presidency as France has positioned itself as a frontrunner in the ambition to get a better control over big tech that are so powerful that they challenge not only governments but all of the European Union.
Big tech companies are forcefully arguing against some of the legislation as the Acts would open up for more competition. They, of course, agree that citizens should be protected against misuse of power but anyway attack parts of the Acts that are meant to exactly protect users from big tech misusing their market dominance.
The big tech companies for sure have resources for lobbying and their arguments are often in the disguise of scientific-like studies.
The outcome of negotiations in the European Council during the first half of 2022 is not only watched by EU countries but by governments and lawmakers all over the world. The two Acts could have a global impact.
DIGITAL MARKETS ACT, a short summary:
- The Digital Markets Act(DMA) proposal blacklists certain practices used by large platforms acting as “gatekeepers” and enables the EU Commission to carry out market investigations and sanction non-compliant behaviours.
- The purpose of the Digital Markets Act is to ensure a level playing field for all digital companies, regardless of their size. The regulation aims to lay down clear rules for big platforms – a list of “dos” and “don’ts” – to stop them from imposing unfair conditions on businesses and consumers.
- Putting an end to unfair business practices by big online platforms
- Restrictions on “killer acquisitions”
- Gives users the option to uninstall pre-installed software applications, such as apps, on a core platform service at any stage
- Whistleblowers should be able to alert competent authorities to actual or potential infringements. They should be protect them from retaliation
- The Commission can impose fines of “not less than 4% and not exceeding 20%” of its total worldwide turnover in the preceding financial year.
DIGITAL SERVICES ACT, a short summary
- Aims to create a safer online space for users, stricter rules for platforms
- The DSA establishes a “notice and action” mechanism, as well as safeguards, for the removal of illegal content.
- Online platforms must be transparent about how algorithms work and platforms should be accountable for decisions they make.
- Measures to counter illegal products, services and content online, including clearly defined procedures for removals
- Mandatory risk assessments and more transparency over “recommender systems” to fight harmful content and disinformation
- Online platforms should be prohibited from using deceiving or nudging techniques to influence users’ behaviour through “dark patterns”
- Targeted advertising: the text provides for more transparent and informed choice for all recipients of services, including information on how their data will be monetised and to better protect minors from direct marketing, profiling and behaviourally targeted advertising for commercial purposes
WHAT’S NEXT
The European Parliament will vote on the proposed Digital Services Act in January. This should not be a problem as the draft act with some additions already has been approved by the most important committee at the parliaments.
The negotiations in the European Council with all member governments are expected to start during the first half of 2022 when France holds the presidency of the Council.
How easy it will be to get the Acts approved by EU member states in the Council is not totally easy to predict. It should work but big tech will not sit still waiting to see what will happen. They are acting against the proposed Acts and they will continue to do so.
It has time after time been proved that big tech companies are using their financial resources for sophisticated lobbying.
A common trick is to pay a more or less respected institution to make a research with data that can be used as arguments against for instance a proposed law. Buying such a study means dressing up big tech’s arguments to make them look like having scientific value.
A recent example is how YouTube, like Google also owned by Alphabet, assigned Oxford Economics to make a study of how YouTubers contribute to the EU’s economy. This was used by YouTube to argue that limiting the right to use recommendations as proposed in the Digital Services Act, would limit how the YouTube could continue to make valuable contributions to the economy within the European Union.
It is more than likely that we will see more of similar studies that are used by big tech trying to water-down the Acts that will increase competition and limit their market dominance.
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