How will the EU regulate the tech giants?

Duroyan Fertl

The European Union is currently negotiating several pieces of legislation to regulate the digital economy, to improve the EUs digital sovereignty and make it fit for the digital decade”. This new digital strategy brings the EU directly into conflict with the so-called “tech giants” – companies like Apple, Amazon, Alphabet, Facebook, and Microsoft that don’t pay their share of taxes, stifle competition, steal media content and undermine democracy.

The struggle against the dominance of the tech giants is not a new one – the EU’s General Court in Luxembourg recently upheld a 2017 antitrust ruling against Google (Alphabet), fining it 2.4 billion euros for using its search engines to promote its own comparison-shopping ads, at rivals’ expense. In Italy, regulators have fined Amazon 1.1 billion euros for abusing its dominance to favour its own logistics service. Nonetheless, such responses are exceptions to the rule of the large online platforms.

How will EU grapple with the difficult task of regulating the tech giants, what is at stake, and what are the potential pitfalls? Is EU-regulation of the field even preferable to the current “law of jungle”? EU-journalist Staffan Dahllöf and Die Linke’s Nora Friese-Wendenburg – who is working on the digital package in the European Parliament – addressed these and other issues during a December 9 debate on the European Commission’s new package of laws on digital regulation.

The proposed Digital Services Act (DSA) and Digital Markets Act (DMA) are intended – respectively – to create a safer digital space for users, where the fundamental rights are protected, and to establish a level playing field for businesses, reining in the tech giants’ power. The DMA – a first step towards more stringent regulation of digital monopolies – had its first debate in the European Parliament in December. Its more contentious counterpart, the DSA – described as a “democratic rulebook for online platforms” – will be debated in January.

Making anything illegal offline, illegal online

Nora Friese-Wendenburg – assistant to Die Linke MEP Martin Schirdewan, co-president of The Left group in the European Parliament – outlined some key details of the new regulations. She pointed out that the Commission’s stated aim for the DSA – making “anything illegal offline also illegal online” – is not easily achieved, risks conflict with other fundamental rights, such as freedom of speech, and acts as a rather blunt instrument.

For example, when it comes to the removal of illegal content, Friese-Wendeburg argued against making platforms liable for free speech content, to avoid flawed algorithms filtering material that may not be illegal. Indeed, there are no general monitoring obligations or stay-down provisions in the current proposals. There will be a notice of action mechanism, but platforms will not be required to use filters or monitor content themselves.

For EU-journalist Staffan Dahllöf, currently investigating the Commission’s digital regulation packages, however, this cuts to the heart of the issue. He argued that even without a legal obligation to use filters, the scale of the task required, and potential political pressures, will lead many platforms to use them in practice.

Who controls content, under what conditions

Despite the DSA’s largely positive intention, Dahllöf identified three key areas of possible conflict: surveillance, content control, and privacy. In short, who has control of content, and under what conditions, is a key concern. He also noted that further EU regulations are foreshadowed, including plans for mandated surveillance of private chat and message services, granting authorities access to encrypted messages on WhatsApp, Signal, or Telegram and crossing the border between public or private.

Dahllöf identified a number of other possible pitfalls, such as making hate speech an EU crime, which he predicted would lead to a backlash. It would, he argued, have an immediate impact on more illiberal forces in the short term, but would eventually come back to impact all of us. Despite the more harmonised approach being advanced, however, Friese-Wendenburg clarified that the current proposals leave the power to decide what is illegal with the member states – the EU’s role remains primarily in enforcement.

More generally, Dahllöf warned against exaggerating the negative impact of online content. Friese-Wendenburg responded that, while it is not currently possible to quantify the impact of targeted advertisements, we do know that it affects younger people a lot more than older generations. It is also incredibly dangerous for a company to decide what information we have access to and use it to influence how we vote, citing Facebook’s influence on the German election.

Regulating the digital monopolies

The DMA, on the other hand – which aims to make digital market fairer and more competitive – was considered a more broadly welcome development. According to Friese-Wendenburg, some 20 big tech players worldwide (not just the “big five” the EU is currently focusing on) play the role of monopolistic “gatekeepers”, stifling competition, freezing smaller companies out or buying them up. The Commission proposal aims to make these monopolies comply with fair practices rules in order to reduce their influence, but the draft regulations would fail to affect all but the largest of these companies.

Friese-Wendenburg argued that recent scandals at Facebook and Instagram also show that self regulation clearly isn’t working, and make the case for strong regulations and consumer protection at EU level. She drew the same conclusion due to the huge size of big tech companies, making them too powerful for individual member states to influence them. Instead, the weight of the entire EU is needed.

In debates in the European Parliament, some MEPs have described the DMA as being “less about breaking these monopolies up than breaking them open”, with greater transparency and a proposal to require interoperability between messenger services, allowing messages to be sent between different platforms – for example WhatsApp and Signal. The DMA also contains a ban on social media targeted ads for minors and a paragraph on whistleblower protections has also been added by MEPs.

Expectations and reality

Looking at the digital strategy overall, Dahllöf expressed doubts about how the EU will meet the expectations it has created. Regulation is certainly needed – most control is currently exercised, not at an EU level, but by national parliaments via self-regulation that is insufficient and largely ignored. Nonetheless, Dahllöf warned against trying to harmonise fundamental rights across 27 EU countries – some EU member states have vastly quite different traditions on, for example, data privacy or on free speech and the freedom to publish.

Looking at the future of the digital package, Friese-Wendenburg also expressed concern that the pressure of lobbying by the big tech companies in Brussels will make MEPs from other political groups abandon their better ideas. For the Left group, protecting freedom of speech remains a priority in the process, as does combatting illegal products, but she acknowledged that – like the GDPR, these debates will have to continue long after this legislation has been adopted.

This event was the last in a series of online debates being held throughout 2021, addressing the COVID-19 economic crisis and mapping dilemmas, opportunities and strategies for the left. The meetings were a collaboration between the Democracy in Europe Organisation (DEO), the Rosa-Luxemburg-Stiftung Brussels Office and three left-wing parties: Enhedslisten (Denmark), Vänsterpartiet (Sweden) and DIE LINKE (Germany).

The event recording is available here: