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Laurie Clarke

Reporter

EU draft rules strike at the heart of Big Tech’s business model

The EU is planning to force Big Tech to share its data with smaller rivals, according to a draft version of the Digital Services Act seen by the Financial Times.

The draft legislation reads that tech giants such as Amazon and Google “shall not use data collected on the platform . . . for [their] own commercial activities . . . unless they [make it] accessible to business users active in the same commercial activities.”

The Digital Services Act is the EU’s landmark piece of legislation aimed at taming Big Tech and setting global digital standards. It’s due to debut early next year, and this first look reveals that the likes of Google and Facebook are right to be worried.

Among other things, the new legislation is set to impose rules around competition – potentially giving the bloc the power to break up companies’ European operations – greater enforcement around tax compliance, and, with regards to content hosting platforms, enforcement around the removal of illegal content.

In spite of the latter point, European commissioner Thierry Breton has made assurances that tech companies will retain their “limited liability” status, meaning they won’t be held accountable for illegal content shared on their platforms. Any change to this has been warned against by internet experts, who say that it would seriously impinge on free expression.

The legislation has platform companies in its sights, with rules specifically targeting ‘gatekeeper’ companies (i.e. those that act as a marketplace for other companies). “Gatekeepers shall not use data received from business users for advertising services for any other purpose other than advertising service,” the legislation reads.

Margrethe Vestager, executive VP of the European Commission for A Europe Fit for the Digital Age, warned that Big Tech would have to start sharing its data with the little guys back in February.

The draft legislation also takes aim at tech companies’ tendency to privilege themselves over competitors on their services. (For example, Google prioritising its own services in search results, or Amazon pushing its own-brand products.) In addition, the legislation says that companies will no longer be able to pre-install their own applications on devices.

The decision to move ahead with this plan paves the way for a grand show-down with Big Tech. The incoming legislation is likely to spark an intense backlash from companies if implemented in full. As a potential sign of things to come, Facebook is currently engaged in a struggle with Ireland’s Data Protection Commission over the Schrems II ruling, which shut down the Privacy Shield data agreement and means the company is no longer able to transfer data easily to the US. In a fit of pique, the company threatened to shut down its entire European operations until the issue is solved.

If Donald Trump wins another term as US president, his appetite for tech sovereignty could also mean an epic clash between Europe and the US, with the latter taking retaliatory measures against the bloc.