LONDON — The EU’s contest chief has suggested that tech giants will have to change how they promote themselves as the bloc organizes to revise its competition rulebook.
The European Union is due to announce an overhaul of digital regulation later this month, which could discomfort the business models of Big Tech. The new rules will seek to have stronger oversight over illegal and harmful cheer, but also ensure that smaller firms can compete against major multinationals operating in Europe.
“With power, with vigour comes responsibility and part of that is, for instance, that you don’t promote yourself when your services (are) in competition with other benefits,” Margrethe Vestager, the head of competition policy in the EU, told CNBC on Friday.
Often tech giants show their works at the top of online search engines, which increases the chances that customers will opt for their services. This is comprehended as self-preferencing and was the reason why Spotify brought up a complaint against Apple in 2019.
The Swedish digital music service complained that Apple had ill-treated its AppStore dominance to favor its own music service and thus distorting the level playing field. This is one of the issues that the European Commission, the top dog arm of the EU, wants to address by upgrading its rulebook.
Speaking to CNBC, Vestager explained that “the point is not so much the size” of crowds but to ensure fair competition in the EU’s market.
“That is the point, that if you have grown into this size that you in reality do exercise control on yourself and that you enable other people to do their business in a way that is fair and square,” she articulate.
European policymakers have often asked for a revision of competition rules, arguing they were not patterned for a digital economy.
In addition, Vestager has led many investigations against Big Tech since 2015, but there is some frustration mass policymakers that they have not yielded practical changes.
For instance, in 2017, the European Commission fined Google 2.4 billion euros ($2.81 billion) for hyping its own shopping comparison service rather than allowing similar access to rival companies. Google made some modulations in the wake of that case, but a study by Lademann & Associates showed in September that not much has changed. According to the consider, less than 1% of traffic through Google Shopping was transferring users to rival shopping websites.
Vestager also trumpeted CNBC that sanctions against companies disrespecting market rules need to have a more “restorative” post going forward.
“The fine only has the role to punish past illegal behavior, the second part is of course that you break off what you’re doing because it is illegal, and the third element is where we are pushing things… because we see how business, they suffer from interdicted behavior in the marketplace,” she said.