Leaked draft EU law reveals tech giants could face huge 6% turnover fines if they don't play by Europe's rules

Tech giants Google, Facebook, Amazon and Apple will face massive fines under proposed European Union rules, up to six per cent of annual turnover, if they abuse their market dominance to crush competition. That’s the headline figure in the draft Digital Services Act, which is due to be unveiled officially Tuesday after five …

[RyokuMas]

Not to worry...

"... smaller platforms like Twitter, Vimeo and Wordpress are worried..."

There's really no need; once the "big four" targeted by this bring their combined legal and lobbying power to bear, there's no way that this will ever go through and become law.

[Pascal Monett]

I disagree

This is the EU. More importantly, this is Eurocrats we're talking about. They live in a special world, one where money did not keep them from drafting laws that furthered Human Rights and the respect of privacy. GDPR, much ?

Lobby money will change nothing. The EU is setting up the legal framework to ensure that everyone plays nicely. It is not a threat in itself. If Apple, Facebook & co play nicely, nothing will happen.

But, if they don't then WHAM! and then they have to explain to shareholders why results are down by 6%.

Suits me.

[Gob Smacked]

Re: I disagree

"...they have to explain to shareholders why results are down by 6%"

It's more than that. Results are only part of the total turnover. If the accused happens to get a good margin of 25% of the turnover as result, this would mean 24% of a hit on the results (not exact, but hey, it's the principle (TM) )

[Mike 137]

Not as powerful as it seems at first sight?

The fines sound draconian, but I doubt the effectiveness of the regulation.

"Article 7

No general monitoring or active fact-finding obligations

No general obligation to monitor the information which providers of intermediary services transmit or store, nor actively to seek facts or circumstances indicating illegal activity shall be imposed on those providers."

This seems to typify the Regulation as far as I can tell on an admittedly cursory reading. Insofar as it provides any kind of direction, it appears to be essentially a specification of "best practice". Almost all articles are very non-specific as to required levels of compliance, leaving to the provider discretion on the standards to be achieved. So it imposes procedural obligations but leaves outcomes undefined. This is typical of a trend that has affected international standards as well - process oriented compliance that doesn't measure results.

[Jellied Eel]

Re: Not as powerful as it seems at first sight?

This is typical of a trend that has affected international standards as well - process oriented compliance that doesn't measure results.

Yup. The cynic in me wonders if this is the point. Politicians generate headlines for taking tough action, where in reality there are loopholes several terabytes wide for the erstwhile targets to drive through. Or it could just be the way the EU works. So if this is destined to become a Directive, then those tend to be more specific. If not, the laws are more guidelines for the individual member states to implement. And as it's a draft, presumably it's still slowly circulating those members competition & market agencies for comment. Especially given the way exercising powers at the EU level can lead to it gaining exclusive competence to legislate in those areas.

But such is politics. I suspect the cynic in me is right, especially given the risk of invoking trade wars with the US. Trump's been rather protectionist, it's unclear whether the Harris/Biden presidency will continue that approach.

[Cederic]

"legal but harmful"

I'm seriously concerned by this attempt by the Government to stop people expressing legal views.

[fajensen]

Re: "legal but harmful"

Legal where and which government? Little Details that matter!

[Cuddles]

Re: "legal but harmful"

"Meanwhile in the UK... Watchdog Ofcom could get the power to fine internet giants up to 10 per cent of their annual global turnover or £18m, whichever is greater, if they do not remove illegal content or tackle legal-but-harmful material."

Yeah, I wonder where and which government it could possibly be referring to.

[codejunky]

Re: "legal but harmful"

@Cuddles

"legal-but-harmful material"

It is criminal to follow the law. What is harmful? How broad a brush does that use? And if it is so bad why is it legal? If it is legal then it is allowed, surely?

Lunatics run the asylum

[[e-mail]]

Re: "legal but harmful"

It's legal to cross the road without watching the traffic because you are concentrating on your phone but that can be pretty harmful - for you and the unfortunate driver you step out in front of. There are plenty of things - from bondage acts between consenting adults to climbing trees without a safety harness, from walking along a cliff edge to paddling out to sea on a blow-up rubber ring - that are completely legal but will drive some people into "health-and-safety" overdrive because there is a risk of harm involved.

The idea that people might be able to consider the risk and decide for themselves if they still want to complete the action is just another aspect of personal freedom being taken away by those who think they know better and feel their prejudices should be allowed to govern everybody's behaviour.

[Jellied Eel]

Re: "legal but harmful"

The idea that people might be able to consider the risk and decide for themselves if they still want to complete the action is just another aspect of personal freedom being taken away by those who think they know better and feel their prejudices should be allowed to govern everybody's behaviour.

Remember we're talking about the Internet here, which has given us crazes like planking, or the Tide pod challenge. Or-

https://www.youtube.com/watch?v=NaAFOrudj0g

Social media is full of people doing stupid and/or anti-social things in pursuit of likes, subscribes & clicks. Watch as our mate sticks his head in a microwave and we fill it full of cement! Keep watching as the inevitable happens, and we call the fire service to perform a twatectomy! Ok, so that last one went viral, but also included a rather contrite segment from the people about just how dumb & lucky they'd been.

But such is politics. This subject came up years ago at a LINX meeting when the IWF wanted to expand it's remit. Problem as always is defining harm. So we have fag packets with official health warnings, but sports like soccer, gymnastics or even cheerleading may cause death & serious injury. So in our new NannyNet, would any of those have to be preceded by official government health warnings? Especially given our current sensitivity to micro-harms and offences.

[TechHeadToo]

Re: "legal but harmful"

That may be correct, but the internet is unique in being a media with no governance. Newspapers, books, election leaflets are all covered by laws of libel and defamation and the rest. The internet is not, so views and comments and incitement’s are allowed unchallenged.

Witness the USA where many people have been allowed to claim absolute untruths as until even twitter - a major culprit for spreading untruth - has taken to placing a warning on some items.

Then, separately, is the issue of how much financial damage this activity is causing to the law abiding organisations in Europe and elsewhere.

Way past time that google ‘do no evil’ and chums were made to be responsible for their actions to some degree, like any other media outlet.

[Anonymous Coward]

Re: "legal but harmful"

It is legal to say that BJ is a moron, but it is harmful to say it since people will then realize that they gave power to a moron...

[steamnut]

Re: "legal but harmful"

But Ofcom has been shown to have no real teeth. Yes, they heavily fine miscreant companies but their collection rate is poor.

[Ordinary Donkey]

Re: "legal but harmful"

It seems like it includes spreading doubt about vaccines, if Matt Hancock's troll farm is anything to go by.

[Danny Boyd]

Re: "legal but harmful"

"Will somebody think of the children?!" in other words.

[Anonymous Coward]

So what's the actual aim?

Is the idea to achieve content regulation, or to enable states to take down content they don't like but blame someone else for enabling that, or are they aware that's hopeless, and it's actually a shakedown?

I find it difficult to tell whether politicians are stupid enough to think they can succeed in regulating the web; I suspect they probably are, but on the other hand, it may just be that they've seen someone has a large amount of money that they're not getting their hands on.

[Jimmy2Cows]

Re: politicians are stupid enough to think they can succeed in regulating the web

Grandiose delusions and a complete failure to understand reality tend to be personality traits of high level politicians. Well, politicians generally, but it gets worse the higher up the food chain you go.

[Anonymous Coward]

Re: So what's the actual aim?

You don't need to regulate the web to achieve 99.99% compliance - you just need to regulate the handful of very large corporations that almost every punter uses.

[fajensen]

Re: So what's the actual aim?

The aim is restoring stability, and taking political power away from squillionaires and back to the people who were voted in to hold that power, a.k.a. Government.

Politicians, Globally, have had quite enough of the tech-bros holding the dicks of both foreign and local adversaries peeing on their shoes, by freely providing them with the platforms and the toolkits to run information attacks against the state and the integrity of the political system with.

The Government now has to clean up the mess after letting every idiot with internet run rampant during the corona pandemic. That little mess have quite clearly shown that "Free Speech" in its extremist interpretation as: "The Right for anyone to say anything that sizzles their bacon to a global audience in any way convenient, with zero traceability, responsibilty or accountability" actually turned out to be a pretty dumb idea for everyone involved! Especially for the 1.5 - 2 millions dead americans to come!!

I find it difficult to tell whether politicians are stupid enough to think they can succeed in regulating the web;

And what will "the web" do exactly to best government? Start a twitter storm? A deluge of Memes? Go all the way with the "Kinetic options" that are readily availabe to government? Train their very own hard men with MP5 submachine guns? Crowdsource some cruise missiles and nukes on Tindie, perhaps?

There will be regulation and "the web" is lucky if it is "only" putting "content servers" into the exact same legal position of other publishers - that they are legally responisible for the content they publish.

Considering what the Daily Mail, The Sun, ... et cetera, gets away with within their regulatory regimes, I think it will be a bit more than just that.

Of course it sucks. Of course several governments will use it to suppress legitimate political oppostion. But, it will happen. And "the web" will toe the line! Thanks to the morons who shat all over a neat thing!!

[J.G.Harston]

Re: So what's the actual aim?

But this isn't the equivalent of holding The Sun to account for what's in The Sun. This is the equivalent of holding The Royal Mail to account for what somebody wrote in a letter.

If Richard Cranium posts something foul on Facebook, Richard Cranium is the culpable person not Facebook.

[Anonymous Coward]

Re: So what's the actual aim?

Unless this applies to private messages between users, or the royal mail publishes all postal mail on a big bulletin board, your analogy fails.

And whilst Mr. Head is culpable, so is Facebook if they don't diligently do something about it.

[John Hawkins]

Design by committee

Nothing ever designed by a committee of any sort is going to be 100% fit for purpose so it doesn't matter if the committee consists of scientists, bureaucrats, politicians, tribal witch doctors or marketing managers. The important thing is that something needs to be done about the tech giants so that the next generation of them can grow up and take over.

If Microsoft had manged to buy Google and IBM Facebook, the online world would have been a different place today.

Don't know if regulating content is the right way to do it though.

[Len]

Re: Design by committee

I beg to differ re:committees. That committees produce inferior solutions is the stuff of ‘Great man’ fantasies. Apart from perhaps some novels, pieces of music or paintings every great achievement or product is the result of teams, groups, combined effort and, yes, committees.

From winning wars to making films, from planning cities to creating the Apple Watch, from developing mightily successful business strategy to drafting laws, none of those things are the work of individuals.

You don’t believe that Steve Jobs personally designed computers or that Elon Musk knows how to build cars and rockets himself, do you?

If you want to do something well, don’t do it alone.

[Danny Boyd]

Re: Design by committee

Do not mix up high-skilled engineering teams and committees of uneducated bureaucrats.

[Anonymous Coward]

Re: Design by committee

I don't think I have ever come across anything that is 100% fit for purpose.

It doesn't make any difference how many people were involved in the design, there are always compromises and fudges.

[Howard Sway]

10 per cent of their annual global turnover or £18m, whichever is greater

This is a slightly weird proposal from the UK, as it seems to think that a "global internet giant" may have a global turnover of less than £180m. Maybe they looked at their tax contributions and thought that they weren't making all that much money.

Also, as a much smaller market, going in at a 10% global turnover fine compared to the EU's 6% is going to see some blighty-bound services disconnected pretty quickly.

Ignore all the lobbying anyway, time for them to learn that with freedom comes responsibility.

[TimMaher]

Re: 10 per cent of their annual global turnover or £18m, whichever is greater

Beat me to that @Howard.

Get you a case of beer for that one.--->

[Homeboy]

Re: 10 per cent of their annual global turnover or £18m, whichever is greater

For quite few years the UK's Competition and Markets Authority has already has the power to fine organisations operating in the UK up to 10% of their global turnover for certain breaches of the Competition Act. It sounds like this new proposal has taken a few ideas from that act.

[tkioz]

The only good thing

The only good thing I'm seeing here is a trend towards fines being based on turnover / revenue because that's the only way they'll be meaningful deterrents. The actual law looks pretty crap and dangerous, but the fines part? That's how lawmakers should be thinking. How many times have you heard about companies being fined some number that is staggering to a normal person but is actually less than a days profits for them.

[codejunky]

Re: The only good thing

@tkioz

"The only good thing I'm seeing here is a trend towards fines being based on turnover / revenue because that's the only way they'll be meaningful deterrents"

I really didnt like that part. Instead of fining profit (money made) they want to fine turnover which is an entirely different figure. And how long until they slide that thinking to the rest of us.

[ectel]

Re: The only good thing

How can the EU fine profit? we all know that Facebook Amazon et al are past masters of moving profit away to somewhere else and not showing a profit (or paying taxes on the non existent profit) at all.

With that level of offshoring going after the revenue (gross input to the company, that is possible to prove) is the only way forward

[codejunky]

Re: The only good thing

@ectel

"With that level of offshoring going after the revenue (gross input to the company, that is possible to prove) is the only way forward"

Ok lets hypothetically accept that as true. We are talking about more laws which will likely slip from the intended targets to the nobodies in this world. Turnover is exceptionally different to profit and could sink a small operation who intends no harm but is caught by the overzealous. A fine against turnover could exceed the profit and cause serious harm to livelihoods.

Remember in the UK we had antiterrorism laws used against dog walkers.

[ectel]

Re: The only good thing

I entirely agree that it is not ideal, however I think it is less easy to get out of, and that is a good thing

Also, yes I can see that it is possible that it could be over zealously applied, however there are checks and balances that i hope would work

Careful now we seem to be agreeing, can't have that on Reg forums!

[codejunky]

Re: The only good thing

@ectel

"Careful now we seem to be agreeing, can't have that on Reg forums!"

Wasnt that one of the signs of the apocalypse? People agreeing on the internet.

[Anonymous Coward]

Re: The only good thing

The only good thing I'm seeing here is a trend towards fines being based on turnover / revenue because that's the only way they'll be meaningful deterrents.

Personal liability, including porridge, for the suits works better. 6% of turnover is just an overhead if it doubles your profits.

[DS999]

Re: The only good thing

It is stupid that they seem to be trying to base it on worldwide revenue. I can't see how that can possibly be legal. Depending on how much business they do in various areas the fine could end up being over 100% of their EU revenue!

Anyway, if there's a "Facebook Europe" subsidiary, that does all the business in Europe, how exactly would the EU be entitled to fine them based on the worldwide revenue of Facebook? And how exactly could the EU force them to pay, if Facebook itself doesn't do any business at all in Europe?

[Anonymous Coward]

Re: The only good thing

Anyway, if there's a "Facebook Europe" subsidiary, that does all the business in Europe, how exactly would the EU be entitled to fine them based on the worldwide revenue of Facebook? And how exactly could the EU force them to pay, if Facebook itself doesn't do any business at all in Europe?

"Entitled" is a small word if you have a big stick. The writ of United States law often travels just as far and wide in respect of subsidiary and parent companies, for example in cases of breaking sanctions against Iran.

There are plenty of penalties available if the fine isn't paid, such as preventing the corporation and its subsidiaries from operating in any way within the EU, seizing its assets and those of its executives, and jailing any executives who come within reach.

[Anonymous Coward]

The Online Harms bill wants to force companies that allow user-generated content that is legal but harmful to be removed quickly while thinking of the children.

Won't it just be easier for companies to require all account holders with UK IPs to tick a box saying they are over 18 (no, honest!)? Probably won't make much difference to the number of users.

Just hope this isn't a backdoor to getting backdoors in encryption or ID card databases.

[Anonymous Coward]

Re Online Harms bill

"Just hope this isn't a backdoor to getting backdoors in encryption or ID card databases."

Of course it isn't. This is the way to make it illegal for you and I to engage in any behaviour the new puritans running things now think is unacceptable (it is worth noting, of course, that it will still be perfectly acceptable for them to carry on doing whatever they want. Reference such delights as the cheap booze in the bar in the Palace of Westminster, the number of politicians caught in compromising situations and the way the "equality" lobby treat anyone who questions them - JK Rowling being the most obvious example).

[Blackjack]

How much they pay in taxes again?

Is more or less than 6%?

[Anonymous Coward]

This is currently how it works:

OP: "It's not surprising Millwall fans booed players taking the knee, everyone's fed up of it now"

Me: "Well, we're all fed up of racism"

OP: "Are you calling me a racist? I'm entitled to my opinion. My opinion is that taking the knee is stupid"

Me: "Why?"

OP: "Its racist against whites. White lives matter!"

Me: (To Facebook) "I'd like to report this comment"

FB: (To me): "That comment doesn't go against our community standards"

Me: (To self): "ok, I'll deal with it myself"

Me: (To OP) "I am also entitled to my opinion. My opinion is that you are a massive twat"

FB: Your comment hasn't been posted and you cannot post or comment for 7 days.

I mean, I'd accept a ban for 7 days for actually calling them a twat, but attempting to call them a twat? Maybe I should go to Parler :-D

[Anonymous Coward]

Fine with fines

Make em substantial and enforce them.

Put the fine money into children’s hospitals and refuges for the socially disadvantaged.

You know, the opposite of what they do in America..