EU warns that it may break up Big Tech companies

The EU will threaten on Tuesday to break up Big Tech companies if they repeatedly engage in anti-competitive behaviour. The warning comes as Brussels publishes its drafts of two major new pieces of tech regulation. A Digital Markets Act will aim to tackle unfair competition in the sector, and a Digital Services Act will force tech companies to take more responsibility for illegal behaviour on their platforms. The long-awaited regulations are the first significant overhaul of the EU’s approach to the internet for two decades. After the European Commission publishes its proposals on Tuesday, they will be voted on by the European parliament and there is no timetable yet for when they will come into force. Both of the regulations carry huge fines for bad behaviour. Big Tech companies that deliberately break new competition rules will be liable for fines of up to 10 per cent of their global revenues. Big Tech companies that do not police their platforms will be liable for fines of up to 6 per cent of their global revenues. But the draft of the Digital Markets Act also states that Big Tech companies that are fined three times within five years will be labelled as repeat offenders and the EU will move to structurally separate their businesses, according to two people with direct knowledge of the plans. If an investigation shows systematic bad behaviour that further strengthens a company’s position, the EU may impose “any behavioural or structural remedies which are proportionate to the infringement committed and necessary to ensure compliance,” a draft of the regulation said. The new rules, if they pass into law in their current form, would represent one of the most stringent set of regulations on Big Tech in the world. They are also an acknowledgment that existing competition law is inadequate and too slow-moving in the digital age, and has failed to curb the rapid ascent and huge market power of the Silicon Valley giants.

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Others in the European Parliament expect Big Tech will try to water down the new rules. Stéphanie Yon-Courtin, another European lawmaker who has played a prominent role in competition policy discussions, said: “I expect platforms to try to divide the EP around fake and simple debates such as being pro versus anti freedom of speech or pro and versus anti innovation.”