By Kelvin Chan & Sam Petrequin
BRUSSELS (AP) --The European Union set the stage for a stepped-up crackdown on big tech companies with an agreement on landmark digital rules to rein in online "gatekeepers" such as Google and Facebook parent Meta.
EU officials agreed late Thursday on wording for the bloc's Digital Markets Act, part of a long-awaited overhaul of its digital rulebook. The act, which still needs other approvals, seeks to prevent tech giants from dominating digital markets, with the threat of whopping fines or even the possibility of a company breakup.
For instance, they face tighter restrictions on using people's data for targeted online ads — a primary source of revenue for the likes of Google and Facebook. And different messaging services or social media platforms will be required to work together.
The new rules underscore how Europe has become a global pacesetter in efforts to curb the power of tech companies through an onslaught of antitrust investigations, stringent regulations on data privacy and proposed rules for areas like artificial intelligence.
"What we have been deciding about yesterday will start a new era in tech regulation," European Union lawmaker Andreas Schwab said at a press conference Friday.
The European Consumer Organisation, or BEUC, welcomed the agreement, saying it would help consumers by creating fairer and more competitive digital markets.
Tech companies were less enthusiastic.
Apple said it was concerned that parts of the Digital Markets Act "will create unnecessary privacy and security vulnerabilities for our users while others will prohibit us from charging for intellectual property in which we invest a great deal."
Google said it will study the text and work with regulators to implement it.
"While we support many of the DMA's ambitions around consumer choice and interoperability, we remain concerned that some of the rules could reduce innovation and the choice available to Europeans," the company said.
Amazon said it is reviewing what the rules mean for its customers. Facebook didn't reply to a request for comment.
The Digital Markets Act includes a number of eye-catching groundbreaking measures that could shake up the way big tech companies operate.
Big tech companies wouldn't be allowed to rank their own products or services higher than those of others in online search results or reuse data collected from different services.
A user's personal data can't be combined for targeted ads unless "explicit consent" is given.
Messaging services and social media platforms must work with each other to avoid the domination of a few companies that have already established big networks of users. That opens up the possibility, for example, of Telegram or Signal users being able to exchange messages with WhatsApp users.
Criteria for defining a gatekeeper have been tweaked to include companies that earn at least 7.5 billion euros ($8.3 billion) in annual revenue in Europe in the past three years, have a market value of 75 billion euros, provide services in at least three EU countries, and have 45 million users and 10,000 business users each year in the bloc.
Violations could be punished with whopping fines: up to 10% of a company's annual income. For a repeat offense, a fine of up to 20% of its worldwide turnover may be imposed. That could work out to billions of dollars for wealthy Silicon Valley companies.
Negotiators from the European Parliament and the Council, which represents the 27 EU member countries, reached the deal after months of talks. It now needs to be endorsed by the Council and the European Parliament.
Google wins legal bid to overturn 1.5 billion euro antitrust fine in EU digital ad case
Google won a court challenge on Wednesday against a 1.49 billion euro ($1.66 billion) European Union antitrust fine imposed five years ago that targeted its online advertising business.
The EU's General Court said it was throwing out the 2019 penalty imposed by the European Commission, which is the 27-nation bloc's top antitrust enforcer.
"The General Court annuls the Commission's decision in its entirety," the court said in a press release.
The commission's ruling applied to a narrow portion of Google's ad business: ads that the U.S. tech giant sold next to Google search results on third-party websites.
Regulators had accused Google of inserting exclusivity clauses in its contracts that barred these websites from running similarly placed ads sold by Google's rivals. The commission said when it issued the penalty that Google's behavior resulted in advertisers and website owners having less choice and likely facing higher prices that would be passed on to consumers.
But the General Court said the commission "committed errors" when it assessed those clauses. The commission failed to demonstrate that Google's contracts deterred innovation, harmed consumers or helped the company hold on to and strengthen its dominant position in national online search advertising markets, it said.
The ruling can be appealed, but only on points of law, to the Court of Justice, the bloc's top court.
The commission said in a brief statement that it "will carefully study the judgment and reflect on possible next steps."
Google said it changed its contracts in 2016 to remove the provisions in question, even before the commission imposed its decision.
"We are pleased that the court has recognised errors in the original decision... Read More