Getty Images | Walter Zerla
The EU will threaten to split up big tech companies on Tuesday if they repeatedly engage in anti-competitive behavior.
The warning comes as Brussels publishes its drafts of two important new technical regulations.
A law on digital markets aims to tackle unfair competition in the industry, and a law on digital services will force tech companies to take more responsibility for illegal behavior on their platforms.
The long-awaited rules are the first major overhaul of the EU's internet approach in two decades.
After the European Commission published its proposals on Tuesday, they will be voted on by the European Parliament and the Council of Ministers, and there is still no timetable for their entry into force.
Both regulations come with heavy fines for bad behavior. Big tech companies that deliberately violate new competition rules can face fines of up to 10 percent of their global sales. Big tech companies that don't monitor their platforms face fines of up to 6 percent of their global sales.
However, the draft Digital Markets Act also stipulates that big tech companies fined three times within five years will be classified as repeat offenders, and the EU will, according to two people with direct knowledge of the plans, a structural separation their company aspires to.
If an investigation reveals systematic bad behavior that further strengthens a company's position, the EU may "impose behavioral or structural remedial action that is proportionate to the infringement committed and necessary to ensure compliance," it says a draft regulation.
The new rules, if incorporated into law in their current form, would be one of the toughest regulations for big tech in the world.
They are also recognition that the existing competition law in the digital age is inadequate and too slow and has not been able to slow the rapid rise and enormous market power of the Silicon Valley giants.
Companies like Google, Amazon, Facebook and Apple are also facing growing hostility in Europe for paying low local taxes, invading privacy and crushing their rivals.
Thierry Breton, EU Commissioner for the Internal Market, who is overseeing the revision of the digital rules, told the Financial Times in September: "The end users of these platforms feel that they are too big to care about."
Margrethe Vestager, EU Vice-President in charge of competition and digital policy, recently voiced her frustration that antitrust investigations have not tamed big tech.
"It is painful that in digital markets, the damage that can be done in that market can happen very quickly, but restoring this market can be very, very difficult," she recently told the Financial Times.
When the draft regulation is published, the EU will also explain how it intends to assess which companies are gatekeepers who dictate the rules of the market. The criteria include a company's global sales in the last three years, the number of users and its market capitalization in the past year.
EU officials said a company's market capitalization is an important metric as it measures a company's ability to raise money quickly in order to attract potential competitors.
However, Brussels' ambition to take over Big Tech is at least two years or more before political clashes and debates in the European Parliament and the Council of Ministers.
Paul Tang, a Dutch Socialist MEP who will be an active participant in the discussion of the new rules next year, said: “The Commission's plans are good, but not good enough to curb the monopoly power of the tech giants.
"Instead, the Commission should aim directly and at least dismantle the perverse business model of these tech giants: the monetization of personal data through advertising."
Others in the European Parliament expect Big Tech to try to water down the new rules. Stéphanie Yon-Courtin, another European legislator who has played a prominent role in competition policy debates, said: “I expect platforms to try to divide the EP into bogus and simple debates like pro versus anti free speech or pro and anti innovation . "
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