The Hustle

Europe is dropping the hammer on Big Tech (again)

The European Commission just rolled out 2 new bills that would police illegal content and rein in Big Tech’s anticompetitive impulses.

December 17, 2020

The largest tech players in Europe — like SAP ($148B), Spotify ($60B), Adyen ($57B) — are minnows compared to competitors in:

The Old Continent may lack punch on the business side — but it  compensates with a BIG hammer when it comes to regulation. And on Tuesday, the European Commission came out swinging.

2 proposed bills are meant to regulate tech

Here’s what’s on the table, per the Wall Street Journal:

The UK is rolling out similar legislation. And while no names were named, the EU’s “gatekeeper” cutoffs (e.g., minimum sales of ~$8B and market cap of ~$80B) sure make it look like it’s going after Big Tech.

The source of Europe’s influence: its massive economy

Countries in the European Union have a combined population of ~450m people and a GDP of ~$20T, right up there with China and the US.

In what is known as the “Brussels Effect” — which nods to the city where EU rules are made — Europe’s size allows it to create laws that the biggest corporations around the world must follow to access its market.

The last major hit was the General Data Protection Regulation (GDPR) privacy law, which has dished out $200m+ in fines for 2020.

The kicker for the new bills are the potential penalties

Violators can be hit with:

In one win for tech, the liability shield for content that passes through a platform would remain.

While there’s no guarantee the bills will get passed, Europe’s antitrust czar Margrethe Vestager sure had some ominous words: “We need to make rules that can bring order into chaos.”

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