Fighting in Brussels bogs down plans to regulate Big Tech


A frank intervention in the European parliament last month captured the frustrations that are blunting the EU’s attempts to curb the powers of Big Tech.

Last year, the EU unveiled a radical blueprint for tech regulation that would put onerous responsibilities on the likes of Google, Facebook and Amazon to clean up their platforms and ensure fair competition.

But since then, the package of measures has become bogged down in the European parliament, and now risks being watered down and heavily delayed.

There are even fears in Brussels that the new rules will not be in place before Margrethe Vestager, the EU’s competition and digital policy chief, leaves her post in three years.

“It sounded like we had agreed but that is not the case . . . at all. We are a long way from having a common position on this,” Evelyne Gebhardt, a German MEP, said in exasperation during last month’s debate.

The slow progress also gives Big Tech more time to fully capture key sectors of the economy. “If we wait too long some markets will not be able to be repaired any more. This is about protecting consumers and small companies in Europe. We need to get this done as soon as possible,” said one person directly involved in the parliamentary debate.

The two proposed bills are the Digital Markets Act (DMA), which is designed to force the so-called gatekeepers, such as Google, to ensure a level playing field on their vast online platforms, and the Digital Services Act (DSA), which clarifies the responsibilities of Big Tech for keeping illegal content off their services.

But the package has split MEPs along a number of fronts.

The biggest fight is over which companies should be captured by the regulation. Andreas Schwab, the lead MEP representing the powerful EPP Group in the parliament, has been pushing for the legislation to focus only on the largest platforms. But his rivals want the legislation to be wider in scope and target a number of digital services.

“If the threshold is too low, it would also capture a number of traditional companies. But this law is not for the general economy but it is specifically to target digital gatekeepers that are shutting down markets,” Schwab told the Financial Times.

Under his proposals, only companies with a market value in excess of €80bn would fall under the new laws. Schwab also wants to target solely the core digital services of each company, for example, targeting only Google’s search and advertising business.

But the Socialists & Democrats (S&D), the second-largest political group in the European parliament, want to include other types of digital services, such as video streaming, music streaming, mobile payments and cloud services.

“If we only go after five companies this won’t fix the problem,” said the Dutch MEP Paul Tang, who said companies worth more than €50bn should be regulated, a threshold that would also capture the Netherlands-based, Germany’s SAP and Airbnb.

“I fear new gatekeepers will rise instantly once you have dealt with Google and the rest. We need the legislation to be future proof,” Tang said. “We have waited more than 20 years to reform the rules of the internet and so we will need to make it strong enough for the upcoming 20 years.”

He also said his party believed the legislation should go after those platforms that offer more than one service because “otherwise Big Tech will know how to bypass the laws with their army of expensive lawyers and this will be a missed opportunity”.

Schwab, who has been quite vocal against Google’s business model, said too broad a focus would water down the EU’s ability to tackle the biggest problems. “We risk having a law that wants to cover everything and achieves nothing. If this happens, it will be a great win for Google and other big tech companies,” he said.

The impasse will not be easily solved. “Everyone has a hard position and nobody is willing to move and compromise,” said a person involved in the debate.

Some remain hopeful that a solution will emerge before EU states, the European Commission and the parliament gather for talks early next year, and before France, which holds the rotating presidency of the EU in 2022, heads into presidential elections in April. A meeting last week between all political parties aimed to bridge some of the gaps.

Separately, MEPs are also fighting over the obligations large platforms should be submitted to. In line with the commission’s proposals, Schwab wants users to give consent over whether their data can be combined across services, for example between Google’s Gmail and YouTube. The socialists want this practice banned.

The S&D is also pushing for the new rules to force Big Tech to prove that acquisitions of small businesses are not harming the market or block them from buying smaller rivals, a measure that Schwab considers too extreme. It also wants a ban on the controversial practice of targeting users with ads, but Schwab opposes this.

Meanwhile, EU states are also vying to influence the outcome of the process. France wants individual states to have more power to fine big tech companies if they do not clean up their platforms. Ireland and Luxembourg, where several big tech companies are based, prefer the status quo.

Under the current rules, only countries where large tech groups are headquartered have the power to impose onerous fines and force platforms to remove illegal content.

“This is the main fight on the DSA that risks derailing it,” said one person with knowledge of the negotiations.

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