The European Union has long been the world’s most aggressive regulator of the world’s biggest technology firms -- and perhaps the most frustrated.
Heavy fines
can easily be shrugged off
by these cash-rich giants, regulations aimed at specific practices
often fall behind in a fast-moving sector and traditional approaches
like antitrust investigations can be too slow to prevent the market
consolidation they’re meant to prevent. Determined to do more, the EU is now set to unveil sweeping legislation
meant to enable regulators to head off bad tech behavior before it
happens or to respond with more potent punishments -- including the
ability to break firms up -- when it does.
1. What is the EU planning?
Laws
that will target so-called “gatekeeper” tech firms -- platforms with
the power to control the markets they operate in. In particular, the
legislation will be aimed at marketplaces, app stores and social
networks as well as online search engines, operating systems and cloud
services, which would hit companies like Alphabet Inc.’s Google, Apple Inc., Amazon.com Inc. and Facebook Inc..
Companies deemed to be gatekeepers would be banned from certain
practices, including favoring their own services in search rankings or
on mobile devices, and could be forced to share customer data with
business rivals. In addition, the EU’s antitrust arm is also seeking new
powers to intervene into digital markets early. EU antitrust chief
Margrethe Vestager has said that tech giants could be broken up as a last resort with that new tool.
2. Why are they doing this?
Failure
to move quickly in the past still haunts regulators, along with the
relative ineffectiveness of fines and conventional antitrust measures.
It took nearly a decade for the EU to find that Google had discriminated against rival shopping search services -- and an order to give them equal treatment hasn’t hugely changed
the fortunes of Google’s competitors. Meanwhile, the large platforms
have been able to set the terms for how their rivals access their own
customers, amassing a wealth of data while doing so and making it hard
for competitors or new market entrants to compete. The EU wants to
intervene more quickly to stamp out such behavior before a market
“tips,” or falls under the dominance of one or a few players.
more at Bloomberg
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