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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.
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.
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.