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How EU And UK reinforcing the rulebooks for Big Techs?

The European Commission and the Competition Markets Authority (CMA) of UK have broadcasted the new-fangled instructions and regulations against the big tech companies- Facebook, Amazon, Google for their unfair business conduct and the data practices in the market. The new regulations will empower the big tech companies to change their practices and behaviour across the globe in order to maintain the reasonable and just competition in the market. The new directions and protocols will help the slight scale companies to compete with these big giants, thus making a fair balance between the two in the market.

Position in European Union
The EU has framed its regulations by introducing the two new legislations- Digital Services Act and Digital Markets Act which are yet to be executed by the European lawmakers.

Digital Services Act
The purpose of the Act is to create a compulsion on the big tech giants to disclose the information to the data and regulators about their algorithms work, what and how decisions are made to remove any illegal content and how adverse are targeted at users. The main provisions of the Act is to validate the measures taken by the big tech companies indicating how they are making the illegal content in accessible when it comes to their knowledge and if not, then would be held liable.

The Act defines the illegal content- any content related to hate speech, terrorism, any child sexual abuse, stalking, copyright violations and non-consensual sharing of the private images. If the companies assess the risks related to any illegal content, then it would be the duty of the company to mitigate those risks. Under the provisions of the Act- the platforms have to sustain libraries of historical ads and providing the detailed information about the reasons to the people seeing ads indicating how they are being affected.

The Act has also mentioned threshold that many of its provisions will apply only to the platforms having more than 45 million users.

Imposition of fines under the framework
If any of the big tech company fails to comply with the rules and regulations framed by the European Union, then the companies would be held accountable with a hefty penalty i.e. up to 6% of its turnover.

Also, if any company furnishes an incomplete, false or fabricated information which is required to be made, then in such a scenario, the company would be slapped with a penalty of 1% of its annual revenue.

Digital Markets Act
The main goal of the Act is to target the Gatekeeper companies for not using the competitor’s data for their owned commercial activities. Also some of the provisions enshrined under the Act states that there should not be any discrimination between the competitors who are using their platform by not treating their own services likely or giving other competitors less favoured action.

Possibility of risk- not complying with such rules and regulations
The gatekeeper companies not complying with the rules and regulations as enshrined under the Act or violating any of the provisions of the Act would be held liable for the penalty which is 10% of the global turnover. Repetitive offenders would be fined up to three times within five years.

Judicial Precedents
  • Amazon faces antitrust suit in an E-Commerce against unfair business practices
    The European Commission has found till now that- Amazon provides the market place for independent sellers as well as for its retail sellers. The commission in its recent findings has noted that the Amazon is giving the preferential treatment to its own retail offers and marketplace sellers that use Amazon’s logistics and delivery services thus breaching the EU antitrust guidelines. The commission will also be investigating the ‘Buy Box’ facility available on its website, whether it is providing any preferential treatment to its own retail offers or not, if proven then would be held liable for breaching the provisions of article 102 of the TFEU.
     
  • Antitrust Commission opens an investigation into Apple's App Store rules
    The Spotify and e-books filed a complaint against Apple’s rules for app developers in the distribution of the apps via App Store. It is alleged that the Apple is charging 30% commission from its app developers through IAP and imposing the restrictions on the app developers to inform users of the same services to other possible apps at cheaper rates. Moreover, it is also alleged that the Apple is providing preferential treatment to Apple Books as compared to e books and Apple Music, if proven then would be found guilty for contravening the provisions of article 102 of the TFEU.
    The UK Antitrust division has also opened an investigation for the same matter.
     
  • Commission has cleared acquisition of Fitbit by Google
    The European Commission has approved the acquisition of Fitbit by Google on certain commitments that the Google will not use the health and wellness data of the users for its advertisement, the data will be stored in a separate ‘data silo’, the users in EEA will have an option to grant or deny the use of health and wellness data which is stored in their Google Account or Fitbit Account. Google will maintain access to users' health and fitness data to software applications through the Fitbit Web API. Also, the commission has allowed other manufacturers to assess Google’s Android operating system and future updates.


Position in UK
The UK has also established the new commands and guidelines in order to inspect the workings of the big tech companies. The new set up guidelines are basically to standardize and examine any unlawful or unfair practices engaged by the big tech giants at any stage in order to promote the reasonable and justifiable practice in the market.

Now, the UK will be regulating the functioning in the digital market through its competition authority i.e. the Competition and Market Authority (CMA) or other regulatory agencies like Information Commissioner’s Office which can together be termed as the UK’s Digital Task Force.

The main idea behind the force is to have the fair and just function in the market and there should not be any unfair business practices by the giant tech companies, in order to maintain parity in the market and to have an evidence based assessment approach towards the companies with a strategic market status.

Some of the proposed guidelines by the Digital Task force would be seen by the Digital Markets Unit (DMU), establishing in April 2021 sitting with the UK’s competition authority i.e. CMA- the rules and regulations will be different for different companies, remedies such as data mobility and inter-operability would be provided and will also be a step forward towards the procedure of the merger regulations.
  1. One of the most significant approach by the UK Government in instituting the Online Safety Bill is for the purpose to regulate the online platforms to remove the illegal or unlawful content from its apps or websites.
  2. The regulations will now be keeping an eye check on the big tech in sharing the data between dominant services and smaller rivals across the social media.
  3. Facebook will be under an eye regarding sharing of data on which posts users interact on their timeline and whereas Google will be forced to provide search history data to alternative search engines.
Thus, UK is opting the hybrid version of the EU’s Digital Markets Act.
  • Imposition of fine for breaching such regulations
The regulatory agencies would be commanding a weighty fine on the companies who will breach its framed regulations i.e. 10% of the total turnover.

Judicial Precedent
UK Competition Authority to probe against Google’s Browser changes
The UK’s Competition Authority- CMA has launched a probe against Google for changing its browser rules- third party cookies and other functions, thus abusing its dominant position in the market if proved as exercising such functions will create an anti-competitive practice in the market for the other digital advertising companies- Marketers for an Open Web. The Google’s Privacy Sandbox will have an adverse effect on the other rival advertising companies. Now, the CMA will work with the Britain Competition Authority to further go on with the investigation.

Conclusion
The Big tech Companies would now be facing a huge regulatory and political pressure in the jurisdictions like EU & UK in order to maintain parity in the market. The new regulations will keep a check on such big tech giants for not engaging in any of the unfair business and unlawful practices including anti-competitive practices. These new-fangled guidelines are a welcoming step towards regulating the unlawful practices engaged by such big tech companies. In a nutshell, the government and competition authorities will now be supervising these giants for not involving in any of the unfair practices, causing any harm to the competition or consumers at large.

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