EU imposes strict rules to curb US tech giants’ power, fined up to 10%

Amazon, Apple, Facebook and Alphabet unit Google may have to refashion their business model and practices in Europe or face hefty fines between 6-10 percent under a new draft EU rules to be declared on Tuesday. The rules are the most serious attempt by the 27-country bloc to involve US tech giants which control repositories of data and online platforms on which thousands of companies and millions of Europeans rely on.

According to Reuters, they also are a response to the European Commission’s frustration with its antitrust cases against the tech giants, notably Google, which critics say did not address the problem. Regulatory scrutiny has been swelling worldwide of tech giants and their power. European Competition Commissioner Margrethe Vestager and EU Internal Market Commissioner Thierry Breton will introduce the rules, a bid not just to bring in tech giants but also to prevent the emergence of anti-competitive dominant companies.


One set of rules called the Digital Markets Act imposes fines up to 10% of annual turnover for online gatekeepers found breaching the new rules, a person familiar with the matter told Reuters. It also proposes out a list of dos and don’ts for gatekeepers, which will be classified according to criteria such as a number of users, revenues and the number of markets in which they are active.

The second set of rules known as the Digital Services Act also targets massive online platforms as those with more than 45 million users. They are imperative to do more to tackle illegal content on their platforms, misuse of their platforms that infringe fundamental rights and intentional manipulation of platforms to influence elections and public health, among others.

The companies will also have to disclose details of political advertising on their platforms and the parameters used by their algorithms to target audiences and rank information.

The draft rules need to reconcile with the demands of EU countries and EU lawmakers, some of which have demanded tougher laws while others are concerned about regulatory overreach and the impact on innovation. Tech companies, which have called for proportionate and balanced laws, are predicted to take advantage of this split to lobby for weaker rules, with the final draft expected in the coming months or even years.