European Union Launches Revolutionary Proposals to Regulate “Big Tech”
On December 15, the European Commission (Commission) proposed drafts of two landmark digital legislative packages — the Digital Markets Act (DMA), which proposes new competition rules for so-called “gatekeeper” platforms to address alleged unfair practices and make them more contestable by competitors, and the Digital Services Act (DSA), which recommends revamping content moderation rules for “very large online platforms.”
The new rules, if they pass into law in their current form, would impose a stringent regulatory regime on Big Tech and give the Commission new enforcement powers. The draft regulations foresee severe fines for noncompliance — up to 10% of a company’s global revenues under the DMA and up to 6% under the DSA. The Commission would also be able to impose structural remedies, such as obliging a gatekeeper to sell all or part of a business, on companies that repeatedly engage in anticompetitive behavior prohibited by the DMA.
The proposals mark the beginning of a legislative process that is likely to be controversial and hotly contested, as there are marked differences of opinion on whether these proposals go too far, do not go far enough, or are necessary at all in light of preexisting competition powers.
European Court of Justice Applies Free Movement Rules of E-Commerce Directive to Advertising by Mail-Order Pharmacy
In its judgment from October 1, the European Court of Justice (ECJ) ruled that an EU Member State cannot restrict a mail-order pharmacy, established in another Member State, from using paid referencing on search engines and price-comparison websites to promote its service, unless the Member State clearly establishes that the restriction is appropriate, and does not go beyond what is necessary, to protect public health. The ECJ further found that several other advertising restrictions imposed by France restricted the freedom to provide services under the e-commerce rules, but added that those restrictions may be justified provided that certain conditions are fulfilled, which is for the national referring court to verify.
EU Court of Justice Confirms Protection of Confidential Business Information in Environmental Matters But Uncertainty Remains
On November 23, 2016, the Court of Justice of the European Union (CJEU) set aside a judgment by the lower General Court which could have set a dangerous precedent for the protection of business secrets and confidential business information (CBI) in environmental cases in the European Union. *
EU Begins Far-Reaching E-Commerce Sector Inquiry
Today, the European Commission sent out the first wave of more than 2,000 questionnaires it has said it will send to companies in connection with its recently-announced e-commerce sector inquiry. This marks the first stage in what is expected to be a far-reaching probe into a wide range of activities and business practices related to online selling in Europe.
The purpose of the sector inquiry is to examine current e-commerce business practices with a view to “breaking down online borders in the European Union.” The Commission will examine whether companies impose—via contract or through other practices—obligations that restrict the ability of merchants and consumers to buy and sell goods and services online across the EU.