Instant View: U.S. tech firms face new EU rules for business practices

Big U.S. technology firms ranging from Apple to Facebook may have to change their business practices in Europe or face fines of as much as 10% of their annual turnover under new draft EU rules announced on Tuesday.

The European Union is trying to rein in tech giants and prevent the emergence of anti-competitive dominant companies.

Following are comments from company executives, industry bodies and analysts:

FACEBOOK SPOKESMAN:
“We believe the Digital Services Act (DSA) and the Digital Markets Act (DMA) are on the right track to help preserve what is good about the internet.

“We also support rules that help foster innovation, enable competition and protect consumer welfare and we acknowledge that these rules must apply to us.

“We hope the DMA will also set boundaries for Apple. Apple controls an entire ecosystem from device to app store and apps, and uses this power to harm developers and consumers, as well as large platforms like Facebook.”

KARAN BHATIA, VICE PRESIDENT OF GOVERNMENT AFFAIRS & PUBLIC POLICY AT GOOGLE

“While we will review the Commission’s proposals carefully over the coming days, we are concerned that they appear to specifically target a handful of companies and make it harder to develop new products to support small businesses in Europe.

“We will continue to advocate for new rules that support innovation, increase responsibility and promote economic recovery to the benefit of European consumers and businesses.”

CHRISTOPH SCHMON, POLICY DIRECTOR AT PRIVACY ADVOCATES EFF INTERNATIONAL:

“Very large platforms should be held to a higher standard of transparency and reporting to tackle systemic risks like speech censorship. But it’s tricky—we don’t want platforms to become the arbiters of what can and cannot be said on the web.”

MYRON BRILLIANT, EXECUTIVE VICE PRESIDENT OF U.S. CHAMBER OF COMMERCE

“Based on preliminary review, the U.S. Chamber is concerned about the direction of today’s proposals, which target American companies almost exclusively by imposing onerous new regulatory requirements backed by steep financial penalties.

“It seems Europe is intent on punishing successful companies that have made deep investments in Europe’s economic growth and recovery. Moreover, these measures will not improve Europe’s own competitiveness.”

EVA SIMON, SENIOR ADVOCACY OFFICER AT CIVIL LIBERTIES UNION FOR EUROPE:

“This regulation will set clear rules for online services and improve the situation, but it’s unlikely to be a turning point without proper enforcement. Giving authorities the power to impose large fines on tech giants does not mean they will do so, or enforce these rules.

“What we need to do is empower users so they can contest decisions by the tech giants, and the authorities must step in when there is abuse.”

SIADA EL RAMLY, DIRECTOR GENERAL OF TECH LOBBY GROUP DOT EUROPE

“At this stage, what we can say is that the Digital Services Act has enormous potential to make a mark for the EU in terms of setting the bar in digital policy making.

“If developed and implemented in the right way, it should provide a more robust framework for online content moderation, providing legal certainty and the necessary assurances for stakeholders at large.”

AXEL HEFER, CEO OF HOTEL PRICE COMPARISON WEBSITE TRIVAGO
“Recent years have shown that global mega-platforms systematically hinder innovative competitors and give preference to their own products.

“The DMA is an important and at the same time necessary step by the European Commission to restore fair competition – and thus to promote innovation.”

WOUT VAN WIJK, EXECUTIVE DIRECTOR OF NEWS MEDIA EUROPE:
“The Commission’s proposals lack teeth and are nowhere far reaching enough to address basic behavioral incentives. We need clear-cut prohibitions on the conduct of gatekeepers and a crystal-clear, reinforced liability regime to rein in tech giants.

“Instead, platforms are now offered carte blanche on liability with a good Samaritan clause and the market investigation tool has disappeared altogether.”

STATEMENT FROM EUROPEAN TELECOMS INDUSTRY ASSOCIATIONS:
“The Digital Services Act has the potential to restore citizens’ trust online and become a stepping-stone to protect EU citizens by requiring that all service providers abide to certain standards if they want to offer their content, goods or services within the European Union.

“In this context, we welcome the Commission’s recognition that some digital actors have an increased responsibility to keep digital services free from illegal material and ensure that the Rule of Law is respected online with the same rigour as it is offline.”

BEN PACKER, PARTNER AT LAW FIRM LINKLATERS
“Today’s proposals from the UK and the EU are the most ambitious measures announced anywhere.

“Though the regimes differ in many ways, both impose new and potentially onerous duties on online platforms to protect their users from harmful content.”