EU: Legislation restricts Gatekeepers

The European Commission on Tuesday proposed two new pieces of legislation that, if passed, would force large technology companies to remove harmful content and open up competition. Otherwise they will have to pay heavy fines.

The Commission characterized the proposed regulations in response to a thorough process of reflecting on the effects of digitalisation on fundamental rights, competition and the economy.

The first proposed measure, called the Digital Services Act, would require all digital services to create measures to combat illegal online content, such as mechanisms to enable users to identify such content and collaborate with "trusted sources". The law would also require companies to create safeguards for users whose content has been deleted from their platforms.

The Digital Services Act does not provide a definition of what is considered illegal internet content, but is based on existing national and Community laws that define what is illegal.

"Very large platforms" will also be required to implement actions to prevent abuse of their systems and transparency measures, such as online advertising and algorithms used to suggest content to users.

Mozilla praised the Commission's Digital Services Act, saying the law's transparency requirements - particularly its call for advertising notifications - would be a major step forward.

"We have said in the past that to better deal with illegal and harmful content on the Internet, we need substantial transparency as to how these problems spread through the online advertising ecosystem," Mozilla said in a statement.

"It's important that the Commission follows the recommendation of us and some other supporters that these disclosure obligations apply to all advertisements."

Companies that cannot restrict the dissemination of illegal online content will face large fines under the proposed law. In the case of very large platforms, such as Facebook, Twitter and YouTube, the Commission will have direct oversight powers and could, in the most serious cases, impose fines of up to 6% of a service provider's worldwide turnover.

Meanwhile, the law on digital markets, which only applies to "security guards", would require these providers to take precautionary measures to maintain competitiveness.

Like Gatekeepers or guards are defined as companies that either earn more than € 6,5 billion in the last three years, or have an average market capitalization or an equivalent market value of at least € 65 billion.

Such measures will include the creation of targeted measures that will allow third-party software to work properly and work with their own services.

The proposed law would also require Gatekeepers to avoid "unfair practices". An example given by the Commission is the exclusion of users from uninstalling pre-installed software or applications.

In addition, the Commission will be empowered to conduct targeted market research to assess whether new Gatekeepers practices and services should be added to the bills to ensure that they are kept up to date with the current digital market landscape.

For those who do not comply with these rules, the EU has proposed fines of up to 10% of their global turnover. The Digital Markets Act, if passed, will enable EU governments to force repeat offenders to take structural measures such as the divestiture of certain businesses, if necessary.

"Both proposals serve one purpose: to ensure that we, as users, have access to a wide selection of secure products and services online. And that companies operating in Europe will be able to compete freely and fairly online as they do offline. We need to be able to do our shopping safely and trust the news we read. "Because what is illegal offline is just as illegal on the internet," said Margrethe Vestager, the EU's executive vice-president.

Last year, Europe imposed on Google fine € 1,49 billion for its anti-competitive advertising practices.

In the United States, Facebook facing separate separate lawsuits from the US Federal Trade Commission (FTC) and a coalition of 46 attorney generals. Both are asking the larger social network to split Instagram and WhatsApp.

Proposed legislation is being considered by the European Parliament and the Member States.

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