The draft of the EU rules, which is due to be published on Tuesday, would mean that technology giants would face heavy fines or be banned from the market for violations.
The EU Commission is preparing to present its long-standing law on digital services and the accompanying law on digital markets in order to set strict conditions for the business activities of internet giants in the 27 countries.
EU sources told AFP on Monday that pioneering legislation would face tech giants with fines of up to 10 percent of their revenues for violating some of the most serious competition rules.
It could also result in some of the world’s largest companies being excluded from the EU market “in the event of serious and repeated violations of the law that endanger the safety of European citizens”.
The proposals that could revolutionize the way big tech do business are aimed at combating hate speech and disinformation online and curbing the power of leading companies to dominate the markets.
The largest companies would be referred to as “gatekeepers” on the Internet under the law, subject to specific regulations to limit their market power.
About ten companies, including Google, Facebook, Apple, Amazon and Microsoft, are given the name.
The draft law will go through a long and complex ratification process, during which the EU Member States, the European Parliament, as well as corporate lobbyists and trade associations influence the final law.
The details of the proposals have so far been carefully monitored by the European Commission, the EU’s executive branch, although some details have been leaked.
The main aim of the new rules is to update the legislation that dates back to 2004, when many of today’s internet giants either didn’t exist or were still in their infancy.
The digital services law is touted to give the commission a stronger teeth in tracking social media platforms for allowing illegal content online.
With the law on digital markets, the EU wants to give Brussels new powers to enforce competition laws more quickly and to push for more transparency in their algorithms and the use of personal data.
Technology giants must inform the EU before any proposed merger or acquisition according to regulations, the bloc’s industry commissioner Thierry Breton said on Monday.
European and US regulators are increasingly concerned that the big tech companies have used purchases to nip potential competitors in the bud.
Examples of this are the takeover of Instagram and WhatsApp by Facebook and the purchase of YouTube and Waze by Google.
For the past decade, the EU has taken the global lead in trying to grapple with the insurmountable power of big tech and impose billions of antitrust fines on Google. However, critics believe the method did little to change their behavior.
The EU has also ordered Apple to pay billions of euros in taxes to Ireland. However, this decision was overturned by the EU Supreme Court.
France and the Netherlands have already spoken out in favor of Europe having all means to contain the gatekeepers, including the power to break them open.
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