European Commission Plans to Protect Small Companies

european commission logo.

Tech companies play an important role in the modern world. However, tech giants could face hefty fines as well as stricter controls due to their behavior in the nearest future as part of sweeping new rules in the European Union. On Tuesday, the European Commission presented two new pieces of legislation that will affect how big tech companies. As a reminder, the European Commission is the executive arm of the European Union.

It is no secret that tech giants are no strangers to various scandals. Moreover, it is quite hard for smaller companies to compete with the tech giants. Importantly, the new Digital Markets Act to improve the situation. People should take into account that, one of the potential changes is putting an end to self-preferencing. For instance, app search results in an Apple product display options developed by the Cupertino-based company. Importantly, the idea is to give smaller app developers the same chance as the big tech companies.

This is not the end of the story, as there are other practical changes as well. For example, companies like Apple and Google will have to allow users to uninstall apps that originally come with their devices. Moreover, the companies will have to share performance metrics with advertisers and publishers for free of charge.

It is worth noting that, failure to comply could result in fines as high as 10% of the companies’ worldwide annual turnover. Importantly, the European Union’s aim is to enforce remedies that will lead to practical changes rather than fining companies on a regular basis.

European Commission and customers

Interestingly, the European Commission presented a second piece of legislation, called the Digital Services Act. The aim of this act is to address illegal and harmful content by asking platforms to rapidly take it down. Importantly, there will also be fines for companies that do not follow these rules.

European governments and lawmakers will have to approve the two pieces of legislation. The European Union understands the importance of regulations. Moreover, other parts of the world are also taking steps toward tougher tech regulation. This week the U.K. made an important announcement. According to the announcement, the tech companies could be fined up to $24 million or 10% of their annual global turnover. It depends on whichever is highest if the companies do not take down illegal content quickly.

The tech companies should work with the European Commission to adjust to the new reality. This way, it will be easier to protect the interests of both sides.

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