The EU is seeking to pass laws to stop online platforms becoming powerful enough to crush rivals, the bloc’s competition chief has said.
Margrethe Vestager described competition law enforcement as “backward looking”, with regulators limited to investigating past behaviour, imposing fines and asking companies to stop “illegal” actions.
Rivals to large players often complain it takes too long to spot and sanction anti-competitive behaviour, by which time the damage to their businesses is often irreparable.
Brussels will publish proposals next week to allow regulators to go after fast-growing companies before they are able to achieve the kind of market dominance enjoyed by Google and Facebook, she added. The EU has yet to reveal how it plans to measure company growth.
Speaking to the Financial Times, Ms Vestager, the EU’s executive vice-president in charge of the EU’s digital policy, said that as well as pursuing Big Tech, those with strong growth potential would need to comply with tougher rules.
In a pre-recorded interview to be aired on Tuesday, she said: “It’s a way of introducing a forward-looking dynamic to complement what we do vigorously in enforcing competition law.”
This means that companies such as Booking.com, which has global revenues of $15bn, and Airbnb, which is planning a public listing in the US, are likely to be subject to a tougher list of obligations than their smaller rivals, according to people with direct knowledge of the plans.
New obligations may include a requirement to share data with their competitors or restrictions on so-called gatekeeping, whereby operators dictate the rules of digital platforms shared with rivals. This could involve a ban on favouring their own services.
Fresh details on regulating gatekeepers come as Europe is drafting criteria that will define which online platforms are defined by the new rules.
Revenues, number of users and the countries where they operate are being considered as ways to determine which platforms must face tougher regulation.
Worried about the possibility of facing more onerous rules than their rivals, Glenn Fogel, the chief executive of the Netherlands-based Booking.com, told the FT last month the regulator was seeking to “handcuff” one of the “very, very, very few tech successes in Europe”. Airbnb said it did not believe the company raised any competition concerns.
Regulators are also seeking to have the power to investigate sectors where there is suspicion that future gatekeepers may emerge, Ms Vestager added, to ensure that markets remain “open and contestable”.
Regulators are already experiencing fierce opposition to plans to curb the market power of Big Tech. Last month, an internal Google document revealed the search giant was plotting an aggressive campaign against high-ranking officials, including Thierry Breton, the internal markets commissioner who is also leading the push against large platforms with tougher rules. Sundar Pichai, chief executive of Google’s parent Alphabet, apologised and said he had not sanctioned the plan.
Ms Vestager said: “I expect a lot of pushback from this regulation when we table it because obviously it will restrict some market players and it will put on them new obligations.” She added the criteria will be objective and that the EU was not targeting specific companies. “This is not about the flag that you are flying,” she said.
Asked if the new Biden administration in the US will help with the EU’s ambitions to regulate Big Tech, she said: “We have a real chance of renewing the relationship with the US because of the new administration.
“I find it very important that we have a strong and good partnership when it comes to [regulating Big Tech].”