Following the proliferation of tech empires and major digital platforms, the European Union aims to take the lead in regulating digital markets going into 2021.
The past year has truly showcased the power that these digital platforms have and the imbalance that they bring to traditional business, media, and other related economic industries. Several lawsuits have been filed around the world to quell monsters such as Google and Facebook, and it is apparent that without proper regulation, these major tech companies will continue to roam free.
As such, the European Union has introduced two new pieces of legislation, the Digital Services Act and the Digital Markets Act , designed to ensure a safe and accountable as well as fair and open online environment. These two pieces of legislation will empower “fundamental rights of all users of digital services” whilst bolstering “a level playing field to foster innovation, growth and competitiveness, both in the European Single Market and globally.” Importantly, this law will be proactive, seeking to manage these tech companies beforehand rather than reacting to an inevitable problem. Also, since the regulation of online services is relatively new, this legislation will provide greater transparency as to the operation of digital platforms as well as enforce overarching accountability.
But despite coming from a sensible place, it is not unlikely that tech giants and digital platforms will show resistance, much like as has been going on with Google in Australia. The Acts will place reporting obligations onto digital platforms as well as create blacklists and whitelists, requiring them to handle user data appropriately, not infringe competition in the market, encourage and permit third party integration into their systems, and export their data freely to competitors in the market.
It will be interesting to see how companies such as Google and Facebook will respond to these obligations and whether similar global powers such as the USA, China and Australia will follow in the European Union’s footsteps to reach an international level of regulation.
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