As much as the United States, the European Union is starting to tighten its grip on technology companies. On Tuesday (15/12), the European bloc presented a draft of regulations that threatens to fine large Big Tech companies such as Google, Facebook, Apple and Amazon by up to 10% of annual revenue and, ultimately, even force them to break up.

The first set of rules, the Digital Markets Act (DMA), targets so-called “gatekeeper” companies, which are those with revenues of more than €6,5 billion in the last three years and a market value of more than €65 billion.

Under the new regulation, such companies could be fined up to 10% of their revenue if they fail to comply with the legislation. Gatekeepers will also be required to report merger proposals to the authorities. With this, the European Union hopes to prevent acquisitions aimed at eliminating competition.

Another set of rules, the Digital Services Act (DSA), targets platforms with more than 45 million users. Companies that run such services will be required to combat illegal content, infringement of fundamental rights and possible political manipulation on the platforms to influence elections and public health. If they fail to comply with the legislation, they could face fines of up to 6% of revenue.

“Both proposals have one purpose: to ensure that we, as users, have access to a wide choice of safe products and services online,” said European Competition Commissioner Margrethe Vestager. “Companies operating in Europe can compete freely and fairly, just as they do offline.”

Europe's threat to tech companies was already scheduled a few weeks ago. The measure aims to especially limit Big Tech, seen as monopolists by the continental market.

Big Tech feels the threat

Those most affected by the EU’s plan have been hostile to the move. Google has warned that the new rules could hurt innovation and technological growth. “We are concerned that this could make it harder to develop new products to support small businesses in Europe,” said Karan Bathia, vice president of government affairs and public policy.

Facebook, in turn, adopted a more discreet stance and took the opportunity to ask for greater oversight over the Apple. “We hope that the DMA will also set limits on the Apple”, said an official statement from the American company. “The Apple controls an entire ecosystem, from the device to the apps and stores, and uses that power to harm developers and consumers, as well as large platforms like Facebook.”

The initiative also faces negative reactions from the Washington government, which sees the regulation as a European effort to collect more taxes.
“Europe appears intent on punishing successful companies that have made major investments in the continent’s growth and economic recovery,” Myron Brilliant, executive vice president of the U.S. Chamber of Commerce, said in a statement.

EU countries still need to approve the bill recommended by lawmakers. While some are pushing for stricter laws, others are considering the potential for a negative impact on issues related to innovation and technological infrastructure.

Image: Kon Karampelas/Unsplash.

Through which channels you reach those people, classic and out of the box. Reuters.