Daily Management Review

New Draft Riles By EU For Large Tech Firms Proposed Fines Of 6-10% Of Annual Turnover


New Draft Riles By EU For Large Tech Firms Proposed Fines Of 6-10% Of Annual Turnover
The new draft rules for regulating large tech companies drawn up by the European Union will force companies such as Amazon, Apple, Facebook and Alphabet unit Google to potentially change their business practices in the bloc or face fines of between 6 and 10 per cent.
The aim of the new rules is to effectively control the power of the United States based tech giants by the 27-country bloc as well as to regulate online platforms which thousands of companies and millions of Europeans have come to depend on.
This new law also indicates the frustration of the European Commission with its antitrust cases against the tech giants, particularly Google, which, according to analysts, has done very little to rectify the areas of concerns for the EU with respect to competition and data privacy.
Globally too, there is greater opposition to the huge power and market dominance that the tech giants have. 
The new draft rules will be presented by European Competition Commissioner Margrethe Vestager and EU Internal Market Commissioner Thierry Breton and the rules will also potentially help to prevent the emergence of new companies that have dominant market position to engage in anti-competitive business practices.
Fines of up to 10 per cent of the annual turnover for online gatekeepers who are indicted for breach of the new rules has been proposed fpr one set of rules called the Digital Markets Act, claimed reports.
A list of dos and don’ts for gatekeepers has also been included in the new draft rules. These dos and don’ts will be classified according to criteria such as number of users, revenues and the number of markets in which they are active, the reports said.
Very large online platforms, those with more than 45 million users, are targeted by the second set of rules known as the Digital Services Act.
The new rules will mandate such companies to be more proactive to prevent illegal content being posted on their platforms, and refrain from misusing their platforms so that there is no infringement of the fundamental rights of Europeans and stop any form intentional manipulation of platforms to exert influence in elections and public health.
Details of political advertising on their platforms as well as the parameters that the companies use to design their algorithms for suggesting and ranking information will also have to be disclosed by them.
The new drafted rules will also need to take care of lawmakers and members states of the EU. Some of the demands relate to implementing tougher rules while others demands showcased regulatory overreach and the impact of the rules on innovation.
It is expected that tech companies will benefit from this split to lobby for weaker rules and press on with their calls for proportionate and balanced laws. It is also expected that the final draft will be issued in the coming months or even years.