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Technology companies have been feeling the heat ever since the onset of the Coronavirus pandemic. Throughout these last six months, they have faced various sanctions and threats from around the world. With the EU trying to bring into play a Data tax, and the American government investigating their power, big tech firms have been under the microscope this year. Several nations around the world have also stated that their handling of false news amidst the global health pandemic has not been satisfactory. The EU, in particular, has been sharp regarding its criticism of the power yielded by such companies. Now once again, the EU has threatened to ban them from the European market unless they follow EU regulations. Let us now take a look at what the ban could mean for the big tech firms and what guidelines the EU wants to be implemented.

EU Ban on the Horizon

The services of tech companies could be banned from the EU unless they follow the organization’s guidelines. EU’s chief of industry, Thierry Breton while speaking to a German weekly named Wely am Sonntag pointed out that the EU is in the process of finalizing their data handling rules. The EU has been very vocal in its criticism of big tech companies, and have been drafting better policies to control the power they wield. The new rules named the Digital Services Act, and the Digital Markets Act will revolutionize the tech industry within Europe. Breton and Margrethe Vestager, who serves as the European Competition Commissioner, will announce the new guidelines on 2 December.

What are the new rules about?

The new guidelines will serve as a list of Do’s and Don’ts for tech companies, acting as gatekeepers for such companies. They will limit the power yielded by such companies and prevent them from monopolizing the European market. It will also force such companies to share the data they collect with both rivals and regulators. Hence, it will also serve as a significant deterrent to the promotion of their services and products unfairly. All of these laws will help the EU have a more significant say on the power and exclusivity yielded by large tech firms. 

Who impact will the new rules have on the market?

The newly drafted rules will have a massive impact on American tech firms, which have been on the firing line for the past year. The EU pin-pointed Alphabet-owned Google, which has failed to stop its anti-competition activities. In the past, Google has been criticized for monopolizing the market and driving competition out by unfairly promoting its services and products. While it has been called out several times, the American giant has failed to curb such practices. Certain industry experts want the EU enforcers to do more than order companies to stop. Hence, the newly drafted rules will give the EU the power to ban such companies from the coalition. As a result, it is safe to say that the tech giants will take these new laws more seriously, fearing a ban from the 27-country political bloc.

What is the need for such rules?

However, until the EU passes the newly drafted rules, the organization does not have the power to enforce its threats. Breton told the German weekly that the power to enforce its threats is important if people wish to see any change. He was clear to state that the EU was done waiting for the change to occur organically. Having appropriate rules and measures in place, including fines, penalties, legal action, and bans will help the companies take these laws more seriously. The laws also allow the enforces to split companies up and limit their access to the Single market, helping them put some weight behind their threats.

However, Breton was quick to point out that the committee would take only required measures, saving the strictest rules for exceptional cases. Also, it is clear to see that big tech firms fear such rules. Google launched a 60-day plan to gain American allies to push back against such EU regulations. Donald Trump has also been vocal regarding his criticism of such strict laws and rules against American companies. But, it looks like such rules will become a reality soon enough and that the tech giants will have to curb their power finally. Such a move coupled with the enforcement of the Data tax would lead to tech giants, such as Facebook, Google, Amazon, Apple, and Microsoft becoming more accountable for their actions. We will have to wait and see to what extent the EU goes in a bid to fight the tech giants and their unchecked power.

Athulya

Being a cinephile with a love for all things outdoorsy, Athulya never misses a chance to chase inspiring stories or poke fun at things, even when the subject is herself. Currently pursuing a degree in mechanical engineering, she is someone innately interested in technical and scientific research. Music reviews and op-eds define her as they allow her to explore different perspectives. Though sometimes she thinks she makes more sense playing the guitar than she does while writing.