How EU and US are trying to rein in tech giants

Last Updated 18 December 2020, 13:16 IST

Tech giants have changed our daily lives but governments around the world are worried they are out of control.

Google, Apple, Facebook, Amazon and Microsoft -- dubbed the GAFAM -- are accused of not paying enough taxes, unfair competition, stealing media content and threatening democracy by spreading false information.

As the European Union unveils tough draft rules to rein them in and dozens of US states hit Google with antitrust suits, here is a global overview of the attempts to regulate the companies.

The 27-nation EU has not yet agreed to tax the digital giants, but some of its member states have forged ahead.

While France and Italy have imposed a three per cent tax on their turnover, Austria is imposing a five per cent tax on their advertising revenues and Spain a three per cent charge on some activities.

Outside the EU, Britain has imposed a two per cent tax on some digital services.

Beyond Europe, in 2016 India imposed a tax on online advertising, and Australia slapped a 10 per cent VAT rate on digital services such as streaming, downloading games and applications for mobile streaming, e-books and data storage.

These moves have not impressed the United States, the home of the so-called GAFAM. The outgoing Trump administration has threatened customs duties in response.

Negotiations on a worldwide tax on multinationals led by the Organisation for Economic Co-operation and Development broke down in October.

The digital giants are regularly criticised for dominating the market by elbowing out rivals.

The EU slapped 8.25 billion euros ($10 billion) in fines on Google between 2017 and 2019 for dominating the market via its Android system.

Microsoft was fined 561 million euros by the EU in 2013 for imposing its search engine Internet Explorer on users of Windows 7. Amazon and Apple are also being probed.

But the biggest potential change came on Tuesday when the bloc unveiled plans for mammoth fines of up to 10 per cent of turnover on tech firms that break competition rules.

Those guilty of "repeated breaches of law which endanger the security of European citizens" risk being broken up or temporarily banned from the EU.

The proposed changes also seek to categorise the biggest online giants as "gatekeepers", subjecting them to stricter rules to ensure they do not abuse their dominant positions to stop competitors getting a toehold.

A source told AFP that currently 10 titans would meet the gatekeeper threshold -- the GAFAM plus Snapchat, Samsung, and Chinese giants Bytedance and Alibaba.

The US is also acting on competition concerns, with US federal and state antitrust enforcers filing cases against Facebook on December 9 to overturn its acquisitions of Instagram and WhatsApp.

Dozens of US states hit Google with antitrust suits on Thursday accusing it of abusing its monopoly on internet search and advertising.

Tech giants are regularly criticised over how they gather and use personal data.

The EU has led the charge to rein them in with its 2018 General Data Protection Regulation, which has since become an international reference.

They must ask for consent when they collect personal information, be transparent about how the data will be used and allow users to delete the data, with failure to do so punishable by heavy fines.

Sanctions exist outside of Europe as well. A US court fined Facebook $5 billion in May for failing to protect its users' personal data.

Social networks are often accused of failing to rein in misinformation and hate speech.

The European Parliament and member states agreed last week to force platforms to remove terrorist content within one hour.

Several national laws have also attempted to tackle disinformation.

In Germany social networks can face up to 50 million euros in fines if they fail to respond to requests to withdraw posts with false information. The German rule imposes the same obligations for hate speech, terrorist propaganda and child pornography.

In France a political candidate or party can ask a court to stop the spread of false information before a national election.

In Kenya, publishing "false, misleading or fictional information" is punishable by a $50,000 fine and/or two years of prison.

These measures remain controversial, however, with critics saying they threaten freedom of speech.

GAFAM are accused by media outlets of making money from journalistic content without sharing the revenue.

To solve this the EU in 2019 imposed a form of copyright law called neighbouring rights that would allow outlets to demand compensation for use of their content on online platforms.

After initial resistance, Google signed agreements with French newspapers in November to pay for using their content, a world first.

In one of the most powerful moves to check the power of US digital giants, Australia also plans to compel the companies to pay media organisations when their platforms host their content or face millions of dollars in fines.

(Published 18 December 2020, 12:57 IST)

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