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Digital Laws “Digital Services Act” and “Digital Markets Act”: How the EU wants to turn the internet inside out


The EU wants to regulate Facebook, Google and Amazon with two large legislative packages called the “Digital Services Act” and the “Digital Markets Act”. The plans are on the home stretch, but there is still a dispute.

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EU Commission building in Brussels: »Design techniques that push consumers to make undesirable decisions«

Photo: - / dpa

For years, states all over the world have tried to regulate the Silicon Valley corporations.

In the near future, the EU wants to try again with two large legislative packages to curb the power of companies like Facebook and Google: with the law on digital markets (DMA) and the law on digital services (digital services act) DSA).

On Thursday, the Council of EU States will determine its negotiating position on the two laws.

Tech giants such as Google and Facebook are to be given more obligations under the threat of high fines, and the rights of consumers are better protected.

As with data protection, the EU could thus set standards worldwide and change the Internet.

Here are the most important questions and answers on the topic:

What exactly is Thursday about?

The ministers responsible for the internal market and competition from the EU countries meet in Brussels.

They vote on their position on the DMA and the DSA.

The EU Commission presented the digital package in December 2020.

Internal Market Commissioner Thierry Breton announced at the time: "With today's proposals, we are shaping our digital space for the next few decades."

The law on digital markets is intended to restrict the market power of a few digital giants such as Google, Facebook and Amazon.

The law on digital services addresses social issues, such as dealing with illegal content on the Internet.

In the coalition agreement presented on Wednesday, the traffic light parties specifically referred to Brussels on the subject.

German regulations such as the Network Enforcement Act are to be adapted to the EU decisions.

The ambassadors of the EU countries have already committed themselves to one position on both laws.

The Council of Ministers is now to formally adopt this line.

State Secretary Claudia Dörr-Voss from the Ministry of Economic Affairs will represent the incumbent federal government.

What does the law mean for app stores?

In principle, the EU states are close to the proposals of the EU Commission.

The DMA aims at gatekeepers in the network, which have a significant impact on the internal market.

Gatekeepers like Apple or Google can use their app stores to determine which apps will prevail or end up on their customers' smartphones with difficulty.

The position of the EU states provides that platforms such as search engines and social networks with at least 45 million active monthly users in the EU or 10,000 annual business customers belong to those gatekeepers.

The threshold for annual sales is 6.5 billion euros.

According to the will of the EU states, the gatekeepers must enable, among other things, apps preinstalled on their devices to be uninstalled. Gatekeepers are also no longer allowed to treat their own products and offers preferentially over those of the competition - that would affect Amazon, for example. In addition, the gatekeepers should not forbid competitors to offer the same offer cheaper elsewhere.

The EU Commission is supposed to enforce all of this.

At the urging of Germany, among other things, the national competition authorities should also be able to start investigations and forward the findings to the Brussels authority.

The possible penalty for violations is up to ten percent of the annual turnover.

"Structural remedial measures" - such as a break-up of the company - should only be imposed in absolutely exceptional cases.

How does the EU want to protect consumers from manipulation on the internet?

With the law on digital services, too, the EU states are sticking very closely to the proposal of the EU Commission.

Basically, the goal is that what is forbidden offline should also be forbidden online - for example the sale of counterfeit products or illegal hate speech.

The following applies: the larger the platform, the more rules it has to observe.

What is new is that the EU states want to ban so-called manipulative »dark patterns«.

The text defines these as "design techniques that force or deceive consumers into making undesirable decisions that have negative consequences for them." This can be advertising disguised as normal content or extremely confusing privacy settings.

The DSA provides penalties of up to six percent of annual sales.

(Read more about how consumers are being misled with online dark patterns.)

Why is Germany not fully satisfied with this position?

In recent years, Germany had pushed forward with the Network Enforcement Act against hatred, hate speech and terrorist propaganda, among other things. Now the incumbent federal government is of the opinion that the council position at the DSA falls behind national regulations in parts. That is why the German representative made an additional declaration when the EU ambassadors voted on the DSA. The text states that “further improvements are necessary to ensure that the DSA is even more effective”.

Among other things, the fear is expressed that the protection of children and young people in the media could be weakened.

The federal government is also calling for deletion obligations and deadlines to be made stricter for very large online platforms.

Germany wants to agree to the common line of the EU states, but relies on negotiations with the European Parliament for improvements.

How is it going on now?

Before the DMA and DSA become a reality, the EU states and the parliament still have to agree on a common line.

To do this, Parliament first has to tighten its own position.

That should finally happen in mid-December.

Negotiations should then be concluded in the first half of 2023 under the French EU Council Presidency.

There is some headwind from the corporations.

Apple criticizes that the DMA could endanger the security and privacy of iPhone users if apps are forced to be loaded from other platforms.

Facebook warns of overly strict political guidelines that threaten to stifle innovations.

hpp / dpa

Source: spiegel

All tech articles on 2021-11-25

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