Tech giants could see data, digital IDs, preferencing on EU hit list under 'gatekeeper' law

11 May 2020 1:25 pm by Lewis Crofts

Digital "gatekeepers" such as Apple, Facebook and Amazon could face a new EU law curbing them from exploiting combined data sets, rolling out digital IDs and hoarding data.

The European Commission is scoping out the new legislation, which could include obligations for the likes of Apple and Amazon to "separate clearly" their roles owning a platform and running business across it.

The contours of the new initiative are revealed in tender documents, seen by MLex, in which EU officials ask for specialist input from consultants on whether the power of large Internet companies needs taming through a new law.

EU commissioner Margrethe Vestager has long talked of the need to heap more responsibilities on Big Tech businesses, saying they shouldn't give "preference" to their own services, and they may face an order to open up access to their data sets.

This latter move would allow smaller rivals the chance to enter the market, even if they can't compete with the vast data sets held by the giants.

But the tender document shows that the commission's eye is cast further, asking for specialist input on six “case studies” that it sees as risk areas for tech markets. This includes phenomena such as the power gained by Facebook when it combined data sets across different services, including WhatsApp.

The regulator suggests tech companies may want to exploit their "conglomerate data holdings," and this makes it harder for newcomers to break in.

It also has an eye on search engines and social media further expanding their economic power through "information asymmetries." This means that giving services away for free in return for data gives Big Tech an advantage over business users and could limit the market entry of different kinds of services, such as "privacy-friendly" networks.

Further attention falls on the use of single logins that "lock in" individuals across combined platforms and third-party providers. "Restrictions or separations of digital ID services from platforms’ commercial operations may be necessary to allow alternative identification methods to enter the market," the commission says.

And there are more indications that tech companies may have to allow potential rivals to "interoperate" with their data to help market entry. "Such an obligation, however, would only make sense for a subset of digital services, e.g. social media services, and should be designed on a case-by-case basis," the EU regulator says.

If tech companies are unwilling to grant access to their data, they could be forced to do this on non-discriminatory terms. But the commission says this would likely be for specific data sets and uses unrelated to the dominant company's main platforms. This could be, for example, for public-policy initiatives.

In total, the six areas the commission flags for specialist research signal the broad scope of the commission’s concerns and potential areas that may appear in any new law.

Failings of competition law

Despite nearly 20 years of investigations into the likes of Microsoft, Google and Amazon, the commission notes the "regulatory gap" where antitrust law fails to land a punch on some digital markets.

So, the consultants are asked to assess whether two potential solutions could help. First, a new legal framework that would include a "regulator" supervising the law and with the power to impose "remedies" to stop the harmful conduct. Second, a more targeted law that would focus on regulating app stores, sharing data and ensuring interoperability, for example.

The commission is setting aside a maximum budget of 600,000 euros ($650,000) for the study.

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