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Will EU Lawmakers Be Able to Enforce Tech Rules?

  • European lawmakers are trying to limit and control the business of global tech giants with the recently passed Digital Services Act (DSA).
  • But it will be a challenge for the European Union to make them play by the rules given the almost unlimited power they have achieved globally.
  • To monitor the application and compliance with the DSA and the Digital Markets Law (DMA), experts in each area will be hired.

Following the recent approval of new rules to try to control global technology companies by European legislators, the question arises whether regulators are actually capable of enforcing these legal guidelines.

On Tuesday, the European Parliament approved the Digital Services Law (DSA), proposed by the European Commission in December 2021, and whose political agreement was finally reached by the bloc on March 25.

The DSA contains a series of new rules that will affect the operations of tech giants Alphabet-Google, Facebook, Apple, Amazon, and Microsoft in Europe. While the Digital Markets Law (DMA), approved last week, will try to regulate the cryptocurrency market and control the crypto industry.

Non-Compliance Fees for Companies

The new rules aim to exert tighter control over the internet and the blockchain-based industry. On the one hand, the new rules are intended to force online platforms to monitor illegal content more closely and, on the other hand, to prevent money laundering through cryptocurrency transfers.

In accordance with the content of the Digital Markets Law, companies that fail to comply with the established rules will face fines of up to 10% of their total annual turnover. Violations of the Digital Services Law warrant fines of up to 6% for operators.

To resolve some pending details in both laws, the European Commission created a working group in which about 80 officials participate. In this sense, a tender of 12 million euros ($12.3 million) was presented, aimed at recruiting experts in each area to help in the investigation and enforcement activities in the following four years.

Recruitment of Specialists and Compliance Monitoring

The commissioner for the internal market of the European Union, Thierry Breton, referred to the possible problems that could arise for the implementation of these community rules. He explained that various teams will address these concerns from different areas such as risk assessments, as well as interoperability of messaging services and data access.

Likewise, regulators have envisioned the establishment of a European Center for Algorithmic Transparency that will incorporate experts in algorithms and data science to help with the application.

“We have started to gear the internal organisation to this new role, including by shifting existing resources,” Breton was quoted as saying by Reuters. “We also expect to ramp up recruitment next year and in 2024 to staff the dedicated DG CONNECT team with over 100 full time staff," he added.

The legislator Andreas Schwab, in charge of this issue in the European Parliament, has insisted on the need to expand the working group to try to counteract the power of Big Tech and the variety of lawyers that these companies have.

"We raised the alarm last week with other civil society groups that if the Commission does not hire the experts it needs to monitor Big Tech's practices in the market, the legislation could be hamstrung by ineffective enforcement," said Ursula Pachl, deputy director general of BEUC.

Key Business Changes

The DMA seeks to force changes in the way global technology companies do business. The law is requiring them to offer interoperable messaging services and provide business users with full access to their data.

In this way, business users would have the opportunity to promote products and services of their rivals on a certain platform. They could also reach commercial agreements with clients outside the platforms.

One of the most controversial and hard parts for technology companies is the impossibility of favoring their own services against those of the competition. They also may not prevent users of their services from removing pre-installed software or applications.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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