Draft EU law could see tech giants fined 10% of revenue

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Facebook, Twitter and Google logos displayed on a phone screen and keyboard are seen in this multiple exposure illustration photo taken in Poland on June 14, 2020. European Commission officials said that Facebook, Twitter and Google should provide monthly fake news reports to prevent fake news about coronavirus pandemic. (Photo Illustration by Jakub Porzycki/NurPhoto via Getty Images)

Facebook, Twitter and Google logos displayed on a phone screen and keyboard are seen in this multiple exposure illustration. (Photo Illustration by Jakub Porzycki/NurPhoto via Getty Images)

Draft EU legislation set to be unveiled Tuesday could see tech giants fined up to 10 percent of their revenues for serious competition violations, EU sources said.

The landmark regulation also envisions banning some of the globe’s leading tech firms from the EU market “in the event of serious and repeated breaches of law which endanger the security of European citizens”, sources told AFP on Monday.

The EU Commission is gearing up to present its long-trailed Digital Services Act and its accompanying Digital Markets Act to lay out strict conditions for internet giants to do business in the 27 countries.

The biggest tech firms would be designated internet “gatekeepers” under the proposals, subject to specific regulations to limit their power over the market.

Google, Facebook, Apple and Amazon, and maybe others, will almost certainly be slapped with the designation.

The proposed legislation will go through a long and complex ratification process, with the EU’s member states, the European Parliament, and company lobbyists and trade associations influencing the final law.

The main intention of the Digital Services Act is to update legislation that dates back to 2004 when many of today’s internet giants either did not exist or were in their infancy.

Tech giants will need to inform the EU ahead of any planned mergers or acquisitions under the regulations, the bloc’s industry commissioner Thierry Breton said Monday.

There has been growing concern among European and US regulators that the big tech firms have used purchases as a way to nip in the bud potential rivals.

Examples include Facebook’s acquisition of Instagram and WhatsApp as well as Google’s purchase of YouTube and Waze.

France and the Netherlands have already come out in favour of Europe having all the tools it needs to rein in the gatekeepers, including the power to break them up.

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