EU seeks sweeping powers to tame tech giants

The European Union says the powers it wants, including the ability to break up large tech firms, would only be used in extreme circumstances

Dev Kundaliya
22 September 2020

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The European Union is seeking to give itself new powers to penalise big tech firms, EU commissioner Thierry Breton has told the Financial Times.

According to Breton, the proposed plan, which will only be used in extreme conditions, includes breaking up technology companies or asking them to sell some of their operations in the region.

Such measures would be taken only if it is found that a firm's market dominance is threatening the interests of consumers and smaller competitors. In rare circumstances, such companies could also be blocked from entering a specific market.

"There is a feeling from end users of these platforms that they are too big to care," Breton told the FT.

As part of the plan, Brussels is also considering to introduce a new rating system to allow the public and stakeholders to evaluate firms' behaviour in areas such as tax compliance, and the time they take to delete illegal content from their platform(s).

Companies would also face penalties for serious anticompetitive activities, such as preventing customers from switching to a rival platform or forcing them to use only one service.

Breton's statements have come at a time when the bloc is hearing proposed amendments to forthcoming Digital Services Act (DSA), which aims to set new rules on tech firms' responsibilities and liabilities, particularly in dealing with disinformation and illegal content online.

Once finalised and submitted, the proposals will have to be approved by the European Council and the European Parliament.

The DSA will update rules that were first adopted nearly 20 years ago, when most of the current big players in the tech sector were either very small or did not exist.

According to Breton, European regulators are finalising a list of activities that tech firms will be required to eliminate. The first draft of DSA will be ready by the end of the year, he said.

Breton compared today's big tech firms to banks before the financial crisis, which were both large in size and in many cases were unwilling to take responsibility for their acts.

"We need better supervision for these big platforms, as we had...in the banking system," Breton said.

In recent years, many major tech companies have faced rising criticism from lawmakers, as well as the public, over various issues, including their market dominance and handling of users' data.

Last year, French authorities fined Google €150m over anti-competitive abuse of search ads; and in 2018, Google paid more money in EU fines than in taxes.

In July 2019, the US Federal Trade Commission imposed a fine of $5 billion on Facebook over the sharing of user data with political consultancy Cambridge Analytica.

Also last year, a group of Google parent Alphabet's shareholders urged the firm to split itself into separate companies before regulators forced it to do so. However, the company rejected the proposal.