Enlarge /. Belgium, Brussels, European Commission, Berlaymont building, Europe flags.
Westend61 | Getty Images
The EU wants to equip itself with new powers to take over large technology companies, including the possibility of forcing them to break up or sell part of their European operations if their dominance threatens the interests of customers and smaller competitors.
Commissioner Thierry Breton told the Financial Times that the proposed remedies, which he said would only be used in extreme circumstances, include the possibility of banning large tech companies from the single market altogether.
Brussels is also considering a rating system that would allow the public and stakeholders to rate company behavior in areas such as tax compliance and the speed with which they remove illegal content.
"The end users of these platforms feel like they are too big to care," said Breton, who leads the block's digital rules revision. "[Under] certain conditions we can also have the power to force structural separation."
His comments followed a public consultation on the upcoming EU digital services law, which will set new rules on platforms' responsibilities for dealing with illegal content and disinformation online.
The DSA will update the E-Commerce Directive, which was passed in 2000 when most of the dominant players in the sector were either in their infancy or did not exist.
Big tech companies are under pressure from other regulators. In the UK, a new watchdog will have the ability to impose fines without going to court, as is currently the case. In the United States, tech founders including Amazon's Jeff Bezos and Facebook's Mark Zuckerberg struggled to convince members of Congress that they had more than selfishness in building their digital empires.
The new EU legislation would expand Brussels' powers to examine the way technology companies collect information about users after independent researchers raised concerns that the voluntary disclosure groups are often misleading or partial.
Mr Breton confirmed that the EU would not waive the limited liability of companies for the content published on their platforms. "The safe haven of indemnity will remain," he said. "It's something that everyone accepts."
However, regulators in Brussels are blacklisting activities that tech companies should root out. They propose staggering the penalties for violations, up to and including the separation of certain cases. Mr Breton said the bill will be ready by the end of the year.
Activities that could result in tougher sanctions include companies preventing users from switching platforms or forcing customers to only use one service, he added.
Comparing the power of the big platforms to that of banks before the financial crisis, Mr Breton said regulators should take similar steps today to contain them.
"It's like you don't have the same rules for small and big banks – you have more flexibility for the smaller players and of course when you become a systemic [bank] you have a [different] set of rules," he said .
Mr Breton said the new oversight system would be based on a concerted effort between national governments and the EU.
"We need better oversight for these big platforms, like we did again in the banking system [after the financial crisis]," he said.
The proposals are currently being finalized and once agreed they will be examined by the European Parliament and the European Council.
An EU official warned Brussels needed to strike the right balance. "Going overboard can backfire and you score an own goal," said the referee. "On the flip side, under-ambition won't address concerns [about big tech]."
© 2020 The Financial Times Ltd. All rights reserved. No redistribution, reproduction or modification in any way.