In new proposals announced on Thursday, the European Commission has decided to regulate the relationship between tech giants and the small companies and vendors who rely on their services.
Under the EU’s plans, companies will be able to collectively sue “online intermediation services” if they fail to deal with complaints in-house or through a system of mediation, according to a draft legal text seen by the Financial Times. The regulation is designed to target “harmful” business practices that allow tech giants to impose unfair trading terms on apps, retailers, or hoteliers that use services such as Apple’s App Store, Amazon or Booking.com.
The regulation is designed to provide a “fair, predictable, and ultimately trusted legal environment” for tech companies to operate in, says the commission’s text. “These legal obligations should ensure that the business users of online intermediation services are given appropriate transparency as well as effective redress possibilities throughout the union.”
“Collective redress could open a floodgate of unnecessary litigation while mechanisms already exist to resolve problems in a much more time-and cost-effective way,” said Jakob Kucharczyk at the Computer & Communications Industry Association, an industry group whose members include Google, Amazon, and eBay. “It seems disproportionate in light of the fact that platforms already have every incentive to be responsive to the needs of their business users.”
The EU security commissioner, Julian King, stated that “short-term, concrete” plans needed to be in place before the elections when voters in 27 EU member states will elect MEPs. The Cambridge Analytica affair had “served to highlight how important [the issue] is,” he told the Guardian. Under King’s ideas, social media companies would sign a voluntary code of conduct to prevent the “misuse of platforms to pump out misleading information.”
“We want to see whether we can rapidly reach [an] agreement with key platforms and stakeholders on a policy level, with them being a bit more open about why you are seeing what you are seeing,” King said.
“It is wise they do it this way,” said Cecilia Bonefeld-Dahl, the director general of Digital Europe, which represents the industry. “If you leave people to take responsibility, it is better than to punish them for something they haven’t done.”
She did, however, give a lukewarm response to some of the commission’s key ideas, such as algorithm transparency, where she warned against an overreaction. “For decades we have had a certain group [of TV viewers] getting targeted ads, at certain times targeted to certain programmes. And this is not illegal, so we need to avoid an overreaction.”