European Union lawmakers reached a broad agreement on new digital platform rules aimed at sharply reducing the power of tech giants.
A review of these platforms’ dominance began in Europe last year amid concern that companies such as Google, Facebook, Apple, and Amazon wield too much control over the buying and selling of goods and services online.
“Today’s agreement marks an important milestone of the Digital Single Market that will benefit millions of European companies relying on digital platforms to reach their customers,” said EU vice president for the Digital Single Market Andrus Ansip in a statement. “Our target is to outlaw some of the most unfair practices and create a benchmark for transparency, at the same time safeguarding the great advantages of online platforms both for consumers and for businesses.”
In recent years, European leaders have been getting tougher with U.S. tech giants on issues such as taxation, antitrust concerns, and privacy and data. Google has been the particular target of ongoing ire and is facing a $5 billion fine for alleged abuses of its Android platform and another $2.72 billion fine in a search antitrust case. Apple is still appealing a ruling that would require it to pay $14.5 billion in back taxes amid allegations that it used Ireland as a tax haven.
But the new rules aim to address more fundamental fears about these companies’ roles in the daily lives of EU residents. The idea is to curb what the EU sees as unfair practices by app stores, search engines, ecommerce sites, and even hotel booking services.
While the EU says the rules target about 7,000 online platforms, those most likely to be impacted are Amazon, eBay, Apple’s App Store, Google’s Play, Facebook, and Booking.com.
One of the goals is to give small businesses, which are increasingly dependent on such platforms, more leverage when they have grievances. For instance, the platforms will now be required to give detailed explanations if they suspend an account, provide clearer terms of service, improve dispute resolution programs, and offer greater transparency.
That last part is likely to cause the biggest rift between Europe and the tech giants. The EU expects disclosure of information like how goods and services are ranked, the kind of insights companies typically insist must remain secret to avoid manipulation.
According to the proposal, online marketplaces must also specify more clearly when they are selling their own products and services — in competition with small businesses. The EU says such sales must be “exhaustively disclosed” going forward.
In addition, greater disclosures will be required around what data is gathered on these platforms and how it is used.
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