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  • Thierry Spanjaard

EU vs. Facebook? Or just peoples vs. megacorporations?

After decades of deregulation and globalization, the new European Commission is in a process of reinforcing its power against the giant players of the digital world. DSA and DMA can be seen as the latest episode in the fight for supremacy between governments and megacorporations.

Considering, the European political, sovereign, economic, social and military system is now totally dependent on non-European digital players, the Commission, under the presidency of Ursula von der Leyen, is reaffirming its objective of reduction of our dependence on foreign providers, in fields such as online platforms, card payment transactions, telecommunications or digital security. “These large platforms have emerged as gatekeepers in digital markets, with the power to act as private rule-makers. These rules, however, sometimes result in unfair conditions for businesses using these platforms and less choice for consumers,” according to the European Commission.

Commissioners Margrethe Vestager, Executive Vice President of the European Commission for a Europe fit for the digital age, and Thierry Breton, European Commissioner for internal market, present the Digital Services Act (DSA) and Digital Market Act (DMA) projects that aim at regulating the way giant companies intrude in our lives and build upon their power to distort competition at the expense of European players.

The projects target very large online platforms that fulfill a series of criteria including storing content of third parties and reaching at least 45 million users in the EU representing 10% of the population. These companies, typically the GAFAM, Google, Amazon, Facebook, Apple and Microsoft are mainly American for the time being, their Chinese counterparts, the BATX, Baidu, Alibaba, Tencent and Xiaomi could fall under the same definition. As of now, European companies are absent from this scope.

At a time when the EU starts to play with the idea of a digital Euro, more or less to counterbalance the Digital Yuan issued and controlled by PBOC (People’s Bank of China), the Commission wants to make sure neither American nor Chinese Big Techs would be able to play a part in issuing any digital euro transactions.

The European Commission states that the DSA and DMA have two main goals:

· to create a safer digital space in which the fundamental rights of all users of digital services are protected, and

· to establish a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally.

Under the DSA and DMA, the very large online platforms will be made responsible for their contents, especially for fake news. They will be required to set up complaint and redress mechanisms, take measures against abusive notices, deal with complaints, and provide user-facing transparency of online advertising. They will have to meet risk management obligations, external risk auditing and public accountability, provide transparency of their recommender systems and user choice for access to information, as well as share data with authorities and researchers. Both Member States and the EU will be in a position to impose financial penalties up to 6% of the global turnover of a service provider if rules are not respected. Penalties may even lead to ask a court for a temporary suspension of their services.

Reducing the influence of the US- or China-based megacorporations may pave the way for many evolutions. For instance, in the field of payments, the inception of a digital Euro has to be Europe centric, and the EPI, the European Payment Initiative, aims at reducing the dependency of our card payment system on foreign powers such as Visa and Mastercard.

In the telecom field, European leaders are already involved in the standardization of 6G within the "Hexa-X” project, led by Nokia, Orange and Telefonica, and funded by EU R&D funds.

The EU brings a better protection of personal data, as has been demonstrated in the recent reaction of European authorities when Facebook announced the change in WhatsApp privacy policy. As a result of European GDPR principles, WhatsApp new privacy rules will make a difference between their European customers and those from the rest of the world.

In the semiconductor industry, Europe is a large semiconductor market but its production only represents a 10% share of the EUR 440 billion industry, according to IDC. The EU, along with governments of Belgium, Croatia, Estonia, Finland, Germany, Greece, France, Italy, Malta, the Netherlands, Portugal, Slovenia and Spain have joined forces to invest in processors and semiconductor technologies to form industrial alliances for research and investment into designing and making processors. The explicit objective of the initiative is to “leverage our existing strengths and embrace new opportunities as advanced processor chips play an ever more important role for Europe's industrial strategy and digital sovereignty," Thierry Breton said in a statement.

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