The European Commission continues to tighten the belt of the
digital giants
.
On the fiscal side, on the technical side and on the political side.
After implementing
measures to try to advance the goal of fair taxation
, this Wednesday
Ursula von der Leyen's team
presented two proposals in one of its main priorities of the legislature: digital transformation.
One, focused on
content and data, to guarantee privacy but also effectiveness,
forcing illegal content (from hate speech to jihadist material to fake medicines, for example) to be removed in less than an hour.
And another,
focused on the competition
, which could ultimately lead repeat or stubborn companies to go out of business if anti-competitive practices are found.
Community legislation on digital matters is out of date
.
It is not an opinion, but a fact.
The two directive proposals want to reinforce, correct or replace those that were approved no less than in 2000, when the internet and technology had nothing to do with what it is today.
The phrase that is repeated most these months in the offices of Commissioner Breton and Vice President Vestager is that the North American giants
are "
too big to care" (too big to care), a play on words with "too big to fail ", the too big to fail, of banks during the financial crisis.
"The two proposals have one purpose: to
make sure that everyone, as users, has access to a wide variety of safe products and services online. And
that companies operating in Europe can compete freely and fairly online as they do abroad. We should be able to shop safely and trust the news we read. What is illegal offline is just as illegal online, "says
Vice President Margrethe Vestager
.
"Many platforms have come to play a central role in the lives of citizens and companies and in our society and democracy in general. With today's proposals we organize our digital space for the coming decades. With harmonized rules, ex ante obligations, better supervision , swift implementation and dissuasive sanctions we will ensure that anyone offering and using digital services in Europe benefits from security, trust, innovation and business opportunities ", added
Commissioner Thierry Breton
, Head of the Internal Market.
The process starts today in Brussels, but it
has to go through the European Parliament, through the Council (national governments) and it may take months or years to complete
, and there is no guarantee that the final result will be as suggested today.
The battle in the European Parliament will be intense, long, and the action of the lobbies can be decisive.
One of the most anticipated, most controversial and juiciest elements is the
possibility of sanctions
.
The two proposals, Digital Services and Digital Market, contemplate a wide range of penalties based on the offense, repetition, bad faith.
On the radar are the largest because the legislation, including the previous one, has a series of thresholds.
Thus, it will be required that the person involved has a certain volume of business, clients or that his company is present in more than one Member State.
To see who the new codes apply to,
the EU will identify a series of 'gatekeepers', of gatekeepers in literal translation, and will update the lists every two years.
The largest in the sector (according to quantitative criteria, such as the capitalization or market value of 65,000 million, a number of users, a turnover of more than 6,500 million euros in the last three years) that are the ones that end up scoring one form or another the rules of the game in the sector.
From 45 million monthly users, 10% of the community population, will already treat them as systemic
.
The two directives want to impose more modern rules, ex ante obligations, very fast and effective supervision mechanisms and a change in philosophy.
The rules apply to everyone, "but the greatest have more responsibilities," they explain in the Commission.
When a company meets these requirements, it will be identified as a 'gatekeeper' and will have
six months to start meeting the demands.
How not to prevent users from uninstalling any pre-installed software or applications.
The 'gatekeepers
cannot use the data obtained from their commercial users to compete
with them or restrict their users from accessing the services they have acquired outside of the platform, for example.
Heavy fines
Giants that deliberately violate competition policies face, as now, a fine of up to 10% of their global revenue.
If, on the other hand, they do not adequately monitor what happens on their platforms (and despite the fact that there is a principle of limited liability), they could be fined up to 6% of a year's income.
Or 1% for procedural reasons.
"In the case of systematic violations, the Commission may impose additional sanctions. Where necessary to achieve compliance, and where equally effective alternative measures are not available, these may include structural solutions, such as forcing the sale of a company or parts of it: units, assets, intellectual property rights or trademarks) ".
The new mechanism, which
assumes strong cooperation at national and EU level, will
monitor how intermediaries adapt their systems to the new requirements.
"Each Member State must designate a digital services coordinator, an independent authority that will be responsible for supervising the intermediary services established in its Member State and / or coordinating with specialized sectoral authorities", explains the proposal.
"The remedies for systematic infractions are not three strikes and out. There is no exact quantitative rule," explains a senior Commission official, "because the remedy depends on the number of infractions, the scale, the importance
. They can be solutions on behavior or structure. Structural
measures, such as forcing a separation or diversification of the business, will only be applied if there are no other suitable remedies or if the others could be worse than the structural ones, "he adds.
"For rebel platforms that refuse to comply with important obligations and therefore endanger people's lives and safety, it will be possible, as a last resort, to
request a court to temporarily suspend their service
, after to involve all relevant parties, "reads the Commission's proposal.
The legislative design also shows some tensions.
The Internal Market Commissioner,
Thierry Breton, is in favor of forcing the partition of the giants,
and has stated this on many occasions.
The Vice President of Competition.
Margrethe Vestager, is much more cautious, and takes every opportunity to warn of the riskyness of that speech
.
And added to all this is the need to rebuild relations with the United States and the Biden administration.
With Trump there were many clashes, but before, with Obama, too.
Washington thinks that the EU tries to fix in the offices what its companies do not achieve in the market, and these measures will be the object of friction.
Partition of the giants
What is a repeat offender?
According to today's proposal, those who receive up to three fines in a five-year period will be considered as such, and in that case the Commission could target the business model and structure of the company.
Any action that is proportional and that leads to compliance, such as the requirement not to take advantage of dominant positions or customer data when a company is both providing a platform and is a participant.
The main tool of the Commission, until now, has been the
Competition measures, but it is an insufficient process
, very
slow
, very ineffective.
Even if it is concluded, after five years of work, the Court of Justice of the EU can revoke a sanction.
It has happened too many times, so the commissioners want to modify the legislation to be able to act better.
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