Global Crackdown on Major Tech Players Continues as EU and UK Introduce New Regulations

By Adriaan Brits Sunday, January 3, 2021

After the United States Federal Trade Commission (FTC) and nearly all states filed antitrust lawsuits against Facebook in the first half of December, the European Union (EU) and United Kingdom (UK) followed with new regulations that aim to limit the power of major tech players.

EU Targets Global Tech Leaders

The European Union released new legislation to regulate businesses of internet giants that operate in the Eurozone. The new bills, called the “Digital Services Act” and the “Digital Markets Act,” involve a set of regulations to curb the power of tech giants operating in the bloc.

Tech behemoths like Apple, Google, Amazon, Facebook, and others will have to comply with the new rules or pay massive fines for breaking them.

According to Reuters and AFP sources, the list involves a set of regulations and penalties tech companies will have to pay for failing to follow these rules:

  • Tech companies could be ordered to pay 10% of their yearly income for failing to comply with the competition rules.
  • “Serious and repeated breaches” could result in a ban from operating in the bloc.
  • Major tech companies would be designated as “gatekeepers.” In other words, these companies will have to comply with stricter regulations.
  • Tech firms would be required to inform the European Union before merging with or buying other companies.
  • Tech firms would be required to share certain data with regulators and competitors. Certain kinds of data must be shared with regulators and rivals.

UK Follows Suit

The UK government is also expected to introduce a set of new regulations for tech companies. Digital Secretary Oliver Dowden and Home Secretary Priti Patel presented new measures that will provide Ofcom, the British regulatory and competition authority, with substantial power over tech companies.

Ofcom will gain the power to penalize companies that break regulations up to £18 million (up to $24 million) or 10% of their yearly global turnover. Furthermore, the regulator will be able to ban non-compliant services from the country, and the new measures involve criminal sanctions that could be imposed on companies’ officials.

The new measures come as a response to the Online Harms White Paper consultation, which Dowden has described as a “new age of accountability for tech to protect children and vulnerable users.”

The legislation will come into effect next year under the Online Safety Bill and will concern any company that controls user-generated content online accessible by British citizens.

“I’m unashamedly pro tech but that can’t mean a tech free for all,” said Dowden.

“Britain is setting the global standard for safety online with the most comprehensive approach yet to online regulation.”

Global Efforts to Limit Power of Tech Leaders

Regulators across the globe have been increasingly focused on regulating tech companies lately, especially companies that acquire other companies to remove them from the competition.

Some of these acquisitions that raised eyebrows among regulators include Facebook’s buyout of WhatsApp and Instagram, as well as Google’s acquisitions of Youtube and Waze.

In the first half of December, the US Federal Trade Commission (FTC) and dozens of states filed antitrust lawsuits against Facebook. Another lawsuit, also filed by the FTC, was filed against Mark Zuckerberg’s company to divest its biggest assets Instagram and Whatsapp.

In the US, the FTC has instructed tech giants, including Amazon, Facebook, Google, and Twitter, to disclose information on how they use and obtain personal user data.

The agency’s Commissioners Rohit Chopra, Rebecca Slaughter, and Christine Wilson said these tech firms now “follow users everywhere through apps on their always-present mobile devices,” watching where their users go, what they do, who their friends are, and more.

FTC emphasized how key questions like how these internet companies use users’ personal data had remained unanswered. The agency is now conducting an investigation to “shed light on the business practices deeply embedded in our digital lives.”

The agency is also keen to find out how these companies collect, follow, and use demographic details, as well as how they choose which ads to show to users. Furthermore, FTC wants to learn how all of these practices affect young children and teenagers.

Apart from the largest companies mentioned above, other tech firms, including ByteDance, Discord, Reddit, and Snap, were also contacted by the FTC and given 45 days to respond.

The agency has employed a law that allows it to carry out “wide-ranging studies that do not have a specific law enforcement purpose” to justify its demands.

Summary

The EU and UK authorities have introduced a set of game-changing new regulations in a bid to curb the power of tech giants, as well as to outline the hefty penalties these companies will face if they fail to follow the rules. In the United States, the FTC has ordered major internet companies to share information on how they collect, track, and use users’ personal data.

About the Author


Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

Related Articles