The European Union’s Commission has proposed a variety of new laws to control the actions of online platforms, including ‘Big Tech’ companies like Amazon, Apple, Google and Facebook.
According to the Commission, this legislation would address market failures that arise from the immense financial power which the largest tech companies possess. The legislation also aims to address the need for online platforms to remove illegal content more effectively.
These laws, which will apply to companies exporting digital services from the UK into the EU, include potential fines of up to 10% of annual global turnover if regulations are found to be violated.
According to a recent report from the UK’s European Scrutiny Committee, the EU’s actions may present further risks and opportunities for the UK‘s regulation of tech companies through upcoming legislation under the Online Safety Bill and Digital Markets Unit.
The proposed EU laws on Big Tech companies can be grouped into two main categories:
The EU Digital Services Act: This creates new content moderation requirements for internet hosting services. The new rules are mainly to ensure that illegal content such as child sex abuse materials or adverts for counterfeit goods is taken down quickly. This covers similar ground to the UK government’s forthcoming Online Safety Bill.
EU Digital Markets Act: This is meant to address market failures arising from the enormous power wielded by some large online platforms like Facebook and Amazon in connecting businesses to consumers and shaping public discourse.
According to the European Scrutiny Committee report, the objectives of the EU’s Digital Markets Act and the UK Government’s Digital Markets Unit are broadly similar. The Digital Markets Unit will oversee the enforcement of a new UK competition regime for large online platforms.
The European Scrutiny Committee report states that the UK has an interest in influencing the final shape of the EU legislation and should seek mutually beneficial convergence where appropriate.
The EU Commission hopes the legislation will come into force in 2023. The parliamentary Committee report has said that this seems optimistic given the complexity of the draft legislation.