If a tech company goes wrong repeatedly, the European Commission wants to break up that company. According to the Financial Times, this is stated in proposals that the committee will officially present later today. New regulation has been discussed for a long time, it is seen as an important part of the approach to the power of technology companies in Europe.
The idea is that if a tech company has been fined up to three times over a period of five years, that company is broken up, writes the business newspaper. Something that happened at Google; the company received billions of fines in 2017, 2018 and 2019. However, the proposals do not have retroactive effect and therefore do not apply to them.
According to Hans Vedder, Professor of Competition Law at the University of Groningen, the European Commission can decide to break down companies. “But they have no means of power to enforce it.” At the same time, the EU is an important market for the platforms and therefore has an interest in adhering to the rules, says Vedder.
The proposal comes from the Digital Markets Act. Thats one of two packages on the table to regulate the tech sector. One is more focused on the economic consequences of the power of big tech. The other looks at, among other things, the role of algorithm. About that already leaked details.
Fines and investigations
The dominant position of tech companies in Brussels has been under a magnifying glass for years. The best known examples of this are the fines received by Google and against which the appeal has appealed. Earlier this year, the European Commission announced two investigations against Apple and there are two investigations against Amazon. Furthermore, there would also be a look at Facebook.
The proposals officially presented this afternoon are the start of what is likely to be lengthy and complex negotiations. The interests are big. The tech companies are very eminded to weaken legislation where possible. It is expected that it might take two or three years before everything is done.
US wants to break up Facebook
The proposals come a short week after the US supervisory authority FTC and US state prosecutors filed two charges against Facebook. According to the parties, Facebook has acquired an “illegal monopoly” and the company must be broken up; it should repel Instagram and WhatsApp.
The social network has already said to oppose this with hand and tooth. The case will go to court there, and this will probably be a long legal procedure.