EU online-platform bill garners mixed reviews from industry, lawmakers

30 April 2018 10:41am
Eu Flag on Keyboard

26 April 2018. By Vesela Gladicheva.

An EU bill unveiled today that seeks to regulate tech giants' business operations has triggered a variety of reactions from industry groups and politicians, giving early clues about the sort of changes EU governments and lawmakers might seek to make to the bill in coming years.

Amendments could see the relatively light-touch rules tightened to prevent discrimination and unfair practices by major platforms such as Google, Amazon, Facebook and Apple.

Reactions from technology companies, online marketplaces, mobile operators and record labels ranged from censure to praise and included calls for more obligations on platforms.

The draft law aims to force large platforms and search engines that dominate the Internet to become more transparent and improve their redress systems when things go wrong.

It comes in response to small traders' increasing dependence on large platforms to gain customers. These platforms "have superior bargaining power, which enables them to effectively behave unilaterally in a way that can be unfair and that can be harmful to the legitimate interests of their [business] users and, indirectly, also of consumers," the European Commission says in its proposed regulation. 

The bill needs to be negotiated separately by the European Parliament and EU governments and then a consensus on a final text reached before it can become law.

More regulation

Reactions from industry groups in Brussels today point to how lobbyists might seek to influence lawmakers and EU capitals.

Associations representing mobile operators and independent record labels — the GSM Association and Impala — said the bill would help address the imbalance in bargaining power between giant "gatekeepers" and small businesses.

But GSMA and Impala also look set to lobby EU governments and lawmakers to include firmer rules. GSMA is particularly worried about the risk of discrimination and unfair practices by major platforms, while Impala says there should be a general obligation on platforms to behave in "a fair, reasonable, objective and non-discriminatory manner."

It won't be surprising if countries such as France and Germany back these calls as they have long called for multinational web companies to face tight regulation in the EU.

Praise and caution

Other industry groups that today praised the bill will aim to thwart such efforts to strengthen the bill. DigitalEurope, Ecommerce Europe and the European Technology and Travel Services Association have all welcomed what they called its measured approach.

At the same time, they warned against introducing further obligations that would hurt innovation. Ecommerce Europe particularly cautioned against amendments aimed at forcing platforms to disclose trade secrets such as algorithms.

No evidence

Only the Computer & Communications Industry Association — which represents Amazon, eBay, Google and Facebook, among other tech and phone companies — said there was no evidence of systemic problems with platforms to justify directly-binding rules.

The problem is technical, the CCIA said. This stance might lead some countries and EU lawmakers to call for a change of legislative instrument, from regulation to more flexible directive to avoid one-size-fits-all legislation.

The CCIA also said that search engines shouldn't be subject to the provisions of the bill, raising questions about whether some EU governments, such as in Nordic countries, might agree with this argument.

Collective action

Under the proposal, non-profit organizations will be able to bring collection actions on behalf of businesses unhappy with how online platforms treat them. But the extent of the collective redress allowed is limited. The mechanism "is meant exclusively to enforce the light-touch transparency and redress obligations," the bill says.

That's probably why industry groups reacting today stopped short of commenting on the collective action proposal, in contrast to some technology lobbyists, who had previously warned that this measure could increase litigation against platforms in Europe. 

Only members of the Socialist political group in the European Parliament praised the introduction of collective actions as a potential avenue to resolve disputes. "We are pleased with the commission’s plans to give businesses the possibility to collectively sue platforms, if they fail to deal with complaints properly," said Italian member Nicola Danti.

Joh Sung-Wook Interview