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Digital Services Act: Brussels vows to 'put order into chaos' of digital world with new tech laws

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By Alice Tidey  & Ana Lazaro, Jack Parrock
A laptop, a bic and a smartphone displaying graphs related to digital growth
A laptop, a bic and a smartphone displaying graphs related to digital growth   -   Copyright  Source: EC - Audiovisual Service/XAVIER LEJEUNE

Brussels vowed on Tuesday to "put order into chaos" as it unveiled plans to limit the power Big Tech companies have in the sector.

The European Commission's landmark regulations, the Digital Markets Act (DMA) and the Digital Services Act (DSA), aim to curb the hegemony of dominant multinationals and force them to be more transparent about how content is ranked, advertised and removed.

It would also provide tech companies with a set of harmonised EU-wide rules to follow and would confirm the bloc's ambition to become the global leader for digital regulation.

"The two proposals serve one purpose: to make sure that we, as users, have access to a wide choice of safe products and services online," Margrethe Vestager, Executive Vice-President for a Europe fit for the Digital Age, said in a statement.

"And that businesses operating in Europe can freely and fairly compete online just as they do offline. This is one world. We should be able to do our shopping in a safe manner and trust the news we read. Because what is illegal offline is equally illegal online," she added.

Digital Markets Act

The Digital Market Act wants to force large companies to allow alternative players to emerge and prevent abuse of their dominant positions.

To do that it wants to prohibit "a number of practices" which it says are "clearly unfair" such as blocking users from uninstalling any pre-installed software or apps.

Gatekeepers — large companies that have an entrenched position in the market — would also be expected to "proactively" put in place certain measures, including allowing the software of third companies to properly function and interoperate with their own services.

Vestager added that gatekeepers will "no longer use the data they collect from businesses they host when competing against them" and that they will be prohibited from ranking their own services higher than those of competitors.

Companies could be fined up to 10 per cent of their turnover for serious continued competition infringement. If they're found guilty of flouting the rules on multiple occasions, the Commission wants to give itself the power to impose "structural remedies," Vestager said.

Digital Services Act

The Digital Services Act would require digital platforms to take responsibility for taking down illegal content, from hate speech to counterfeit goods. It would also create some "safeguards" for users whose content has been erroneously deleted by platforms.

The Commission also wants more transparency on the platforms' online advertising and on the algorithms used to recommend content to users. Finally, it wants to impose new rules on the traceability of business users in online market places, to help track down sellers of illegal goods or services.

For the first time, regulators have defined very large platforms deemed to be gatekeepers as those with more than 45 million users, or the equivalent of 10 per cent of the bloc's population. Sanctions include fines of up to six per cent of global turnover.

What's the background?

The current legislation enforced for technology companies in the bloc, the E-Commerce Directive, dates back to the year 2000.

While big players including Amazon and Google were already operational then, several others that have since reshaped the technology — and democratic — landscape were not. This includes Facebook, Twitter, Instagram, Youtube and TikTok.

The Commission has already launched multiple investigations into the competition practices of the so-called GAFA — Google, Apple, Facebook, Amazon — and handed out large fines to the companies. Vestager, who has headed most of the investigations, stressed that "complaints keep coming through our door so we have many more investigations".

The proposed new rules could still take months, if not years, before they become law. The will still need sign-off from the European Parliament and the Council of European member states.

Vestager said she is hoping the two Acts could become law in around a year and a half.

'A pity'

The European Digital Rights (EDRI) network of NGOs defending rights and freedoms online described the Commission's proposals as "a good first step to regulate the immense economic, societal and political power that Big Tech companies have acquired".

"It is a pity, however, that the Commission has stopped short of also tackling the systemic problems of the platform economy such as the hyper-intrusive data collection business model and the deliberate locking in of their users in closed systems," it added in a statement.