EU regulators are arguing over who should play what role in enforcing the regulations
Europe is almost done with rewriting its digital rules. Now comes the hard part: who to impose.
On Thursday, European Union (EU) countries approved the Digital Services Act and the Digital Markets Act - landmark proposals aimed at rebalancing the online world for the benefit of consumers, while keeping big technology companies more responsible for what is published online and for competition with smaller companies, writes Politico.
EU leaders hope to finalize these rules with their counterparts in the European Commission (EC) and the European Parliament (EP) in the first half of next year. However, there are already some questions - which regulators will have the right to impose huge fines - between 6 and 10 percent of the company's annual revenue, for potential violations.
On the one hand, some want the Commission to take a bigger role in monitoring the activities of Facebook, Google and Amazon, after efforts to enforce the block's privacy standards, the General Data Protection Regulation (GDPR), have fallen into the trap of disputes between national regulators over who is responsible.
On the other hand, others want individual member states to retain important powers. This camp includes national agencies, especially competition authorities.
Brussels has built its reputation as the digital policeman in the West on these new proposals, hoping to encourage its own member states and allies such as the United States and Britain to follow suit by limiting potential violations to mainly Silicon Valley giants. However, the new rules will be as good as the way they are implemented, and politicians are divided over the role that the Commission has to play vis-à-vis national authorities.
These differences must now be bridged over the next six months before the European Digital Code, which covers both antitrust and social media laws, becomes law in the entire bloc of 27 countries, most likely by 2023.
The battle over how much control the Commission will have over Europe's updated digital legislation differs between the Digital Services Act (DSA) and the Digital Markets Act (DMA). According to initial proposals for the DSA, which regulates policies to moderate illegal content on social media and e-commerce sites, Brussels was expected to play a second violin in front of national regulators.
In line with the legal tradition in the bloc, national supervisors would be the most important law enforcement agencies, unless the problems cover several countries, which requires EU officials to intervene.
This has changed in the last year of negotiations. The plans, approved by national governments, will make the Commission the sole regulator for major technology companies such as Facebook and Google, entrusting Brussels with the power to impose fines of billions if those companies do not sufficiently counter illegal content on their platforms. National regulators will control smaller platforms.
This 180-degree reversal stems from the experience of European privacy rules, which require an agency - primarily the Irish or Luxembourg data protection authority - to be the sole regulator responsible for US technology giants, as these companies are based in both sides because of lower taxes.
When it comes to the Digital Markets Act, the question is not whether Brussels will have enough power. It's about whether he won't be given too much power. This change in the policy outlined in the DMA to act before, not after, potential distortions represents a profound change in the application of competition rules.
The Commission has already set up a working group on the Digital Markets Act, which could ultimately play an instrumental role in implementing the new rules. For now, Brussels is working to ensure that antitrust proposals are approved early in the New Year.
