Leaked draft EU law reveals tech giants could face huge 6% turnover fines if they don't play by Europe's rules
- Reference: 1608020888
- News link: https://www.theregister.co.uk/2020/12/15/eu_digital_services/
- Source link:
That’s the headline figure in the draft Digital Services Act, which is due to be unveiled officially Tuesday after five years of work, but a [1]leaked copy of which was [2]shared online on Monday. It affirmed the tech industry’s fears of severe sanctions. In the case of Google, a six per cent annual turnover fine would amount to $9.6bn.
“The Commission may impose on the very large online platform concerned fines not exceeding 6 per cent of its total turnover in the preceding financial year where it finds that that platform, intentionally or negligently: (a) infringes the relevant provisions of this Regulation; (b) fails to comply with a decision ordering interim measures under Article 55; or (c) fails to comply with a voluntary measure made binding by a decision pursuant to Articles 56,” the proposed text reads.
In addition, the companies could be fined up to one per cent of their annual turnover if they provide “incorrect, incomplete or misleading information” to European investigations. Together they put tech giants on the line for tens of billions of dollars in fines if they don’t play by EU rules.
Twitter, Mozilla, Vimeo slam Europe’s one-size-fits-all internet content policing plan [3]READ MORE
The regulation is the result of what the draft said has been the failure of the EU’s e-Commerce Directive, passed in 2000, to deal with “the dynamic growth of the digital economy and the appearance of new types of service providers” – something it puts down to “legal fragmentation.” The idea of the Digital Services Act is to introduce a set of standards across Europe while allowing the different EU member states to set the exact definitions of things like illegal content.
As a result, for example, the proposed law doesn’t differentiate between different types of content. Terrorist images, child abuse images, copyright, defamation and so on are all just content with nation states left to draw distinctions.
Pain point
Article 55 refers to interim measures that the EU can place against a tech giant – rather than waiting for the lengthy regulatory process to play out – and Article 56 refers to commitments made by companies to the EU. The rules are designed to make it painful financially for US-based giants to move policy goalposts or stretch out proceedings.
Meanwhile in the UK... Watchdog Ofcom could get [4]the power to fine internet giants up to 10 per cent of their annual global turnover or £18m, whichever is greater, if they do not remove illegal content or tackle legal-but-harmful material. These powers will be provided by the Online Harms Bill set to be revealed by the government this week.
There is much more in the draft, including requirements for greater transparency in advertising, requirements to tackle disinformation, illegal content, content moderation and much else. The overall goal is to “set a robust and durable governance structure for the effective supervision of providers of intermediary services,” the act says.
The publication of the act is just the first step in what could be a lengthy process as the rules pass through the European Commission and European Parliament for review and approval, but it is the first critical draft. Tech giants have already responded by [5]flooding Brussels with lobbying money and drawing up attack plans.
Even before it’s been published, the internet industry is worried about what the impact may be – and it’s not just the likes of Google and Facebook. Internet infrastructure companies have [6]pleaded with the EU not to put them in the same bucket as Facebook and friends, and smaller platforms like Twitter, Vimeo and Wordpress are [7]worried about harmful content been seen as “a solely stay up-come down binary” which could see them disadvantaged compared to the giants. ®
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[1] https://regmedia.co.uk/2020/12/14/dsa.pdf
[2] https://twitter.com/SamuelStolton/status/1338542552576888838
[3] https://www.theregister.com/2020/12/10/twitter_mozilla_eu_data/
[4] https://www.bbc.com/news/technology-55302431
[5] https://www.nytimes.com/2020/12/14/technology/big-tech-lobbying-europe.html
[6] https://www.theregister.com/2020/09/09/eu_data_networks/
[7] https://www.theregister.com/2020/12/10/twitter_mozilla_eu_data/
[8] https://whitepapers.theregister.com/
I disagree
This is the EU. More importantly, this is Eurocrats we're talking about. They live in a special world, one where money did not keep them from drafting laws that furthered Human Rights and the respect of privacy. GDPR, much ?
Lobby money will change nothing. The EU is setting up the legal framework to ensure that everyone plays nicely. It is not a threat in itself. If Apple, Facebook & co play nicely, nothing will happen.
But, if they don't then WHAM! and then they have to explain to shareholders why results are down by 6%.
Suits me.
Not as powerful as it seems at first sight?
The fines sound draconian, but I doubt the effectiveness of the regulation.
" Article 7
No general monitoring or active fact-finding obligations
No general obligation to monitor the information which providers of intermediary services transmit or store, nor actively to seek facts or circumstances indicating illegal activity shall be imposed on those providers ."
This seems to typify the Regulation as far as I can tell on an admittedly cursory reading. Insofar as it provides any kind of direction, it appears to be essentially a specification of "best practice". Almost all articles are very non-specific as to required levels of compliance, leaving to the provider discretion on the standards to be achieved. So it imposes procedural obligations but leaves outcomes undefined. This is typical of a trend that has affected international standards as well - process oriented compliance that doesn't measure results.
"legal but harmful"
I'm seriously concerned by this attempt by the Government to stop people expressing legal views.
Re: "legal but harmful"
Legal where and which government? Little Details that matter!
Re: "legal but harmful"
"Meanwhile in the UK... Watchdog Ofcom could get the power to fine internet giants up to 10 per cent of their annual global turnover or £18m, whichever is greater, if they do not remove illegal content or tackle legal-but-harmful material."
Yeah, I wonder where and which government it could possibly be referring to.
So what's the actual aim?
Is the idea to achieve content regulation, or to enable states to take down content they don't like but blame someone else for enabling that, or are they aware that's hopeless, and it's actually a shakedown?
I find it difficult to tell whether politicians are stupid enough to think they can succeed in regulating the web; I suspect they probably are, but on the other hand, it may just be that they've seen someone has a large amount of money that they're not getting their hands on.
Re: politicians are stupid enough to think they can succeed in regulating the web
Grandiose delusions and a complete failure to understand reality tend to be personality traits of high level politicians. Well, politicians generally, but it gets worse the higher up the food chain you go.
Re: So what's the actual aim?
You don't need to regulate the web to achieve 99.99% compliance - you just need to regulate the handful of very large corporations that almost every punter uses.
Design by committee
Nothing ever designed by a committee of any sort is going to be 100% fit for purpose so it doesn't matter if the committee consists of scientists, bureaucrats, politicians, tribal witch doctors or marketing managers. The important thing is that something needs to be done about the tech giants so that the next generation of them can grow up and take over.
If Microsoft had manged to buy Google and IBM Facebook, the online world would have been a different place today.
Don't know if regulating content is the right way to do it though.
Not to worry...
"... smaller platforms like Twitter, Vimeo and Wordpress are worried..."
There's really no need; once the "big four" targeted by this bring their combined legal and lobbying power to bear, there's no way that this will ever go through and become law.