Big Tech Companies Could Face More Rules in the EU
Big Tech Companies Could Face More Rules in the EU
Platforms such as Google, Amazon.com or TripAdvisor could
be regulated on terms offered to small businesses
By Natalia Drozdiak Updated May 10, 2017 10:17 a.m. ET
BRUSSELS—Tech companies in Europe face the prospect of
more rules dictating how they conduct business.
The European Union’s executive body is considering new
rules that would prevent web platforms, such as Alphabet Inc.’s Google,
Amazon.com Inc. and TripAdvisor Inc., from offering unfair terms to small
businesses that use their services to sell or promote products.
The European Commission on Wednesday said it wants to
address complaints by businesses about unilateral contract changes, lack of
access to essential sales and customer data and poor transparency regarding
companies’ rankings in search results. Companies also lack possibilities for
redress to resolve disputes, the EU said.
“It’s quite clear to us that the platforms are
gatekeepers and in the business-to-business relationships there are a certain
number of problems,” said Jörgen Gren, a senior EU official involved in the
initiative.
The commission said it would carry out detailed analysis
to decide by year-end whether new legislation is needed. Brussels initially
flagged the concerns of businesses about transparency on platforms last May.
When tackling problems of transparency with search
results, the EU said it wouldn’t necessarily require platforms to divulge the
inner-workings of their algorithms but that the topic would be discussed as the
commission conducts its analysis. The commission will also explore whether
paying providers are ranked higher in search results than others, an EU
official said.
Search rankings are at the heart of one of the cases by
the commission’s competition directorate against Google, which Brussels accuses
of skewing results to preference its own comparison shopping service over that
of rivals. Google denies the charges.
The plan to further scrutinize web platforms’ operations
comes as part of the commission’s midterm review of its Digital Single Market
project, through which the EU aims to translate its single market in goods and
services among its 28 member states into the online space. The project entails
more than a dozen legislative and other initiatives, such as harmonizing the
bloc’s data protection rules and ensuring consumers can shop across borders
online.
The commission’s deliberations highlight ongoing concerns
in top European policy circles about the power of U.S. technology companies,
which had sparked a flurry of investigations, including the three separate EU
antitrust probes into Google. Both Brussels and national capitals are cracking
down on how tech companies operate here regarding issues such as data privacy,
copyrights and taxes.
At the same time, the commission is eager to promote
small businesses and entrepreneurs at a time when the bloc is still suffering
from a generally weak job market. Seeking to create jobs, the commission has
encouraged the growth of the so-called sharing economy—platforms like Uber
Technologies Inc. that link service providers to consumers.
Associations representing large American tech companies
said they were dismayed by the commission’s plans for platform rules.
“We believe there’s not enough of a basis for general
intervention and that the European Commission should use other instruments when
there’s market failure,” said James Waterworth, vice president for Europe at
the U.S.-based Computer & Communications Industry Association, a lobby
group that represents Facebook Inc. and Google.
EDiMA, a European trade association representing online
platforms such as TripAdvisor and Apple Inc., said it was “disappointed and
astounded” at the announcement.
‘We believe...the European Commission should use other
instruments when there’s market failure.’
—James Waterworth, vice president for Europe, Computer
& Communications Industry Association
The EU on Wednesday said it would also in the coming
months publish guidance to encourage technology firms to more quickly remove
hate speech and extremist rhetoric from their platforms.
The commission says it has no plans to propose concrete
legislation in the area, but rather wants to clarify minimum requirements for
takedown procedures, such as whether a form of acknowledgment of receipt by the
platform is needed when a user flags content.
Internet companies have faced increased pressure from
authorities to accelerate removal of terrorist content and hate speech after a
number of deadly terror attacks in Europe in recent months.
The companies already try to remove illegal information
when it is reported, but face criticism they don’t do so rapidly enough or take
enough of the content down. The tech firms say they are wary of initiatives
that infringe on freedom of expression.
Separately, the commission’s competition directorate
published the findings of its two-year long probe into the e-commerce sector.
The EU reiterated warnings that consumer-product makers and digital content
owners could face antitrust probes for restricting the way retailers sell the
companies’ goods online.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
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