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European Parliament Approves Stricter Rules for Digital Giants

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The competent committee of the European Parliament has approved the proposal to impose stricter rules on the largest companies in the digital sector.

 

The so-called gatekeepers, whose size means they hold key positions in the internal market, will in future clearly know the ‘do’s and don’ts’ to follow, rather than risk prosecution for unfair trading practices, as is the case today.

The Digital Markets Act (DMA) was presented by the European Commission in December last year as part of a broader package that imposes new, updated rules for all digital services. Among other things, search engines, social networks and other ‘systemic’ players will have to ensure that third-party software functions properly on their platforms and that user data is properly managed.

The European Parliament’s Internal Market Committee adopted its position on the draft regulation on Tuesday morning. With 42 votes in favour, 2 against and 1 abstention, a large majority supports the stricter rules.

Next month, the plenary will finalize the parliament’s mandate for negotiations with member states. MEPs have amended the Commission proposal on several points. For example, only companies with an annual turnover of at least 8 billion euros in Europe and a market capitalization of 80 billion euros or more would fall under the scope. The Commission had proposed thresholds of EUR 6.5 billion and EUR 65 billion, respectively.

Names of companies to which the law will apply are not mentioned, but these are likely well-known digital giants such as Google, Amazon and Facebook. When it launched its proposal, the Commission assumed that ten to fifteen companies would be involved. To be defined as gatekeepers, they must also serve at least 45 million monthly users and 10,000 professional users – thresholds with which Parliament and the Commission align.

However, all this would not prevent the Commission from identifying other companies if they meet certain conditions. The national regulators will also have a major responsibility. If it depends on the parliament, they must work closely together to coordinate their tasks. According to MPs, companies that do not follow the rules should be fined up to 20 percent of their worldwide turnover. Tom Vandenkelaere (CD&V) voted in favour of the draft law on Tuesday.

“Big Tech cannot and should no longer operate in an online Wild West,” he says. A Digital Services Act, DSA, is still under discussion. Vandenkdelaere is also won over for that. “Due to the DSA, platforms will have to take responsibility in the future for what goes wrong with their algorithms and provide more transparency about this.”

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