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The executive branch of the European Union is scheduled to release two sweeping legislative proposals on Tuesday that will set the stage for regulating Big Tech in Europe.
Draft proposals of the Digital Services Act and Digital Markets Act will be released by the European Commission in an overhaul of digital regulation in the bloc.
The Digital Services Act will tackle the behavior of online platforms, such as Google, owned by Alphabet GOOGL, -0.16%, and Facebook FB, -1.49%, in particular their responsibilities over the content that they host.
It will define what constitutes illegal content and lay out specific remedies. This could cover hate speech, terrorism, child pornography, and the sale of illegal products, and is likely to include misinformation and disinformation in its scope.
Failing to comply with the new rules on content could cost technology giants billions of dollars in fines, according to reports from the Financial Times and Politico.
The Digital Markets Act will usher in targeted regulation of what the Commission calls “gatekeeper” platforms — the tech giants such as Amazon AMZN, -0.59% and Apple AAPL, +2.90% that dominate access to the internet and its markets.
The chief concern of regulators is that gatekeepers manipulate the markets they host to illegally give preference to their own products and services.
Breaking up companies hasn’t been ruled out. Facebook, which also owns WhatsApp and Instagram, is a likely target for breakup talks, analysts have noted.
Pro-competition reforms could prevent, for example, Google giving preference to its own price comparison tools on search engine pages — the subject of a claim made by a group of 135 companies including travel-booking companies Trivago TRVG, +3.96%, Tripadvisor TRIP, +0.51% and Expedia EXPE, +1.21%, and business-review website Yelp YELP, -0.95%.
The way third-party data, or cookies, are shared is another reform expected from the Digital Markets Act.
Analysts and experts have noted that the draft regulation will be watched closely for precedent, as Google and Facebook face their own antitrust legal challenges at home in the U.S.
