The European Union is seeking to impose fines of up to 10% of a company’s revenues in a curb to stop the power bids made by today’s tech giants. These organizations could also face orders from the EU to divest their businesses.
These rule changes are part of a December 2020 effort to implement “gatekeeper rules” for the continent. Tech companies given this designation could face these massive fines if they don’t follow the EU’s rules on data usage.
The current companies that would receive the gatekeeper designation in Europe include Amazon, Apple, and Google. These new rules, which legislators want to work alongside antitrust laws, prevent the agencies from using customer data from business users to compete against them, or treat internal products or services more favorably.
What Defines Non-Compliance in the New Rules?
The European Union says that companies that systematically infringe on their obligations to protect business-related consumer data could face orders to make structural or behavioral changes.
This designation applies if a company receives three fines within five years.
A company must have a user count in the millions before earning the gatekeeper designation from the EU. The overall revenues of a qualifying organization must be higher than $1 billion, and the agency’s impact on the global data market will also get evaluated.
The designations get updated every two years under this proposed plan.
As part of the rules package, companies will also face responsibility for the content that users post on their platforms. Fines of up to 6% of total global revenues could apply for the social media websites that fail to comply with orders to remove illegal posts or terrorism propaganda.
This legislation aims to stop tech companies from having too much influence on global politics and international relationships. If these agencies become too profitable, consequential, or large, they could create the same issues that happened during the 2007-2008 recession in the financial markets.