By Valentina Pop and Sam Schechner 

BRUSSELS -- Big tech companies including Google parent Alphabet Inc., Amazon.com Inc. and Facebook Inc. face a swath of proposed European regulations aimed at curbing their alleged anticompetitive behavior, making them pay more taxes and compelling them to shoulder more responsibility for illegal content on their platforms, said a top European Union official.

Margrethe Vestager, the EU's digital-policy and antitrust czar, detailed for the first time a comprehensive plan of how she aims to rein in U.S. tech giants, using a package of initiatives that the EU has begun to outline individually in recent weeks. The aim is to clearly delineate new legal boundaries for tech companies, rather than just apply existing laws covering fields such as antitrust regulation.

"It's a full complex of things. It's not done with just one piece of legislation," Ms. Vestager said in an interview with a small group of reporters. Ms. Vestager -- who in her prior term as European competition commissioner levied record fines on Google and ordered Apple Inc. to pay Ireland $14.5 billion in allegedly unpaid taxes -- last year was promoted to vice president of the European Commission, the EU's executive arm, in charge of competition and new legislation for the digital sector.

"After the first mandate and the first specific competition cases, what I have seen very clearly is that we need rigorous competition-law enforcement, but we also need regulation," she said.

Tech companies have said that they want to work with the commission to craft the new laws, but several have raised concerns about elements of the proposals. Representatives for Google, Facebook, Apple and Amazon, asked about the commission's new approach, either didn't respond, declined to comment or referred to earlier replies on the individual EU proposals.

Ms. Vestager's regulatory plans would keep the EU at the vanguard of a movement to more tightly regulate tech companies -- though other parts of the world are increasingly joining the debate. The EU in 2018 put into force a data-protection regime known as the General Data Protection Regulation, or GDPR, which was imitated in several other jurisdictions and inspired California's data-protection measures that took effect in January. More European regulation in the digital sector is likely to have an impact beyond the Continent, with other jurisdictions following suit. The U.S. Justice Department last month proposed rolling back rules that limit companies' responsibility for what people post on their platforms, and the U.K.'s antitrust authority has proposed creating a special antitrust unit focused on digital markets, which could have powers potentially including ordering large companies to share data with smaller ones.

They come as most European governments that have rolled out coronavirus contact-tracing apps are using Google and Apple's new software framework to do so, including Germany and Italy. France is the last big holdout, and its app has suffered from a low adoption rate.

The EU in May published guidelines for governments and tech companies on how to balance privacy with the need to gather sensitive health data. Ms. Vestager has endorsed the kind of system used by Apple and Google, in part because it leaves most user data on the phone -- a rare instance of U.S. companies earning high marks from European privacy advocates.

"If it's voluntary but people don't trust it and don't sign up, it doesn't work," Ms. Vestager told The Wall Street Journal in an April interview.

Last week, Ms. Vestager spelled out three separate pieces of new legislation that are likely to be presented by the end of this year, including one tackling platforms' liability for their content. Several EU governments and the European Parliament have advocated such measures, so the proposals are likely to win broad support in principle and could become law as soon as the end of next year.

The EU's current e-commerce rules date to the year 2000, "when no one could have foreseen the situation we're in today, that platforms would not just be channels, but full ecosystems where a lot of what is ongoing is monetized by the platform itself," she said.

She said the EU won't demand that platforms be "liable for each and every post or fake bag that is put up for sale," but rather that they create redress mechanisms that businesses and individuals can appeal to when their posts and ads are taken down.

Another condition to be imposed would require platforms to establish themselves as business entities in Europe, Ms. Vestager said, "so that they are all governed by these sets of rules, and that goes for platforms wherever they come from on this planet."

Decades-old laws on the books in the U.S. and Europe have shielded tech companies from much liability for what their users do on their platforms. Policy makers on both sides of the Atlantic have proposed rolling back those protections, blaming tech platforms for allowing the spread of electoral misinformation, coronavirus-related hoaxes and other malevolent posts.

The commission in June launched a monthlong public consultation on proposed changes to the existing Digital Services Act, which forms part of the new legislative package. Apple responded by defending the current regime. "The limited liability regime has helped deliver choice and innovation," the company's response said. Apple also called for new rules to be flexible enough for a range of service providers."What makes sense for public-facing, content-sharing platforms may not be appropriate or technically feasible for services used to facilitate private communications or storage," the company said.

Another piece of legislation would list prohibited practices. It is aimed at stopping platforms from leveraging their dominance to quash smaller rivals and is inspired by the three EU antitrust cases against Google that brought fines totaling more than $9 billion.

Separately, Ms. Vestager said in the interview that she is seeking enhanced investigative powers that would allow her to order all companies in a certain sector to change their behavior so they don't monopolize a particular market. This would "prevent new gatekeepers from arising, so we can still have the benefit of competition in the market," she said.

In taxation, the EU is considering establishing its own digital tax now that the Trump administration and European countries including France have reached an impasse in international talks on the topic. The European Commission, like several European countries, has said over the past year that if international talks fail by the end of this year, the bloc will put forward its own digital tax proposals.

The EU has proposed establishing a dedicated technology-and-trade dialogue channel with the U.S. to iron out such issues. "We will do what we can in order to make that happen," she said.

Ms. Vestager said a digital tax is justified by fairness. "So many businesses have to work very hard to make a profit, and from that profit to then pay taxes," she said. "They should not be met with competitors for capital, skilled employees and customers who do not contribute to society. That has nothing to do with where you come from, it has to do with doing business in an equal manner."

In a submission to the commission last week, Google cautioned against adopting strict rules prohibiting it from promoting its own services, for which it has already been fined by the EU. The company said the practice could help users, citing as an example its practice of putting its own maps on top of some Google searches.

Google is the object of preliminary antitrust investigations into several of its nonsearch services, with the commission having sent out new requests for documents in recent months, Ms. Vestager said.

Facebook has said the goal of the proposal might not be to address an "enforcement gap," but rather "lowering the legal and evidentiary standard for intervention" to allow the commission to act and impose remedies.

Tech lobbyists are also pushing for caution before enacting new rules. "The commission should carefully weigh evidence of new potential theories of harm against the potential costs of top-down intervention," said Kayvan Hazemi-Jebelli, competition and regulatory counsel for the Computer & Communications Industry Association, a lobby group that represents companies including Amazon, Facebook and Google.

Write to Valentina Pop at valentina.pop@wsj.com and Sam Schechner at sam.schechner@wsj.com

 

(END) Dow Jones Newswires

July 05, 2020 16:19 ET (20:19 GMT)

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