with Tonya Riley

Europe’s proposed rules for online businesses would solidify its reputation as the world’s toughest tech regulator. 

The European Union yesterday unveiled a pair of proposals that could force tech companies to more aggressively police their platforms for harmful content and also put new restrictions on how large companies compete with smaller rivals. The rules carry fines with up to 10 percent of the companies’ global revenue, and repeated violations could force a breakup of the companies, my colleague Michael Birnbaum reports. 

The rules would build on the aggressive stance the European Union has already taken on regulating American tech companies’ data privacy practices under its sweeping General Data Protection Regulation. Ireland’s Data Protection Commission yesterday brought an approximately $546,000 fine against Twitter for not properly documenting or notifying authorities of a data breach that became public in January 2019. 

Europe is moving much faster than the United States in forming tech regulations.

That is potentially giving the E.U. the opportunity to influence tech regulation throughout the world, as countries including the United States move to more aggressively regulate the tech industry. Already, GDPR is influencing how companies manage their data, and U.S. lawmakers have asked European officials and companies about it as they craft privacy regulations. 

The new proposals – known as the Digital Markets Act and Digital Services Act – could be next. 

“Since the global market is adopting our standards, if we push forward, we’ll be the first ones crafting the rules,” Eline Chivot, a senior policy analyst at the Center for Data Innovation, a Brussels think tank, told Michael. “Everyone will follow our lead.”

With yesterday's proposal, leaders in Brussels are moving to address issues that are still under fierce debate in the halls of Congress – including how much responsibility . The European Union also moved much earlier in bringing antitrust charges against major American tech companies, something that regulators are just beginning to do in the United States with high-profile cases against Google and Facebook setting off what are likely to be years-long processes. 

The Digital Markets Act could force major changes in how tech giants operate. 

The proposed rules center on preventing so-called “gatekeepers” from using their position in the market to give their own services priority over smaller rivals. They could have major implications for large companies including Facebook, Google, Apple, Amazon and Microsoft. 

(Amazon CEO Jeff Bezos owns The Washington Post).

The rules would prevent the companies from using data gathered by their services to launch products or services that go up against competitors – which is a major concern of U.S. lawmakers raised about Facebook and Amazon in their recent investigation of competition in Silicon Valley. They would also prevent the companies from giving their own services special preference when deciding how to rank them on screens.

Experts say its likely the proposal could force major changes to Google and Apple's app stores, my colleague Reed Albergotti reports.

The legislation likely allows app developers to inform their customers that they can subscribe to digital services directly, circumventing the App Store, where Apple collects a 30 percent cut on most digital service sales,  Damien Geradin, a competition lawyer based in Brussels who has represented clients opposed to Apple.  The 30 percent cut is at the center of the criticism of Apple and many the allegations of anticompetitive behavior by the iPhone maker. 

The new laws also appear to prohibit Apple from requiring developers to use “Sign in with Apple,” a new service that competes with similar offerings from companies like Google.

The Digital Services Act aims to improve online safety through increased scrutiny of the biggest tech companies. 

The rules governing companies obligations on content moderation are on a sliding scale, with the largest tech companies required to take on greater responsibilities. All companies under the law must provide users with a clear terms of service. 

The  biggest tech companies would face fines if they don't do enough to stamp out illegal content such as hate speech. They would also have to participate in regular independent audits of their systems. The largest companies would have to share data about their content moderation practices with authorities and researchers. 

“We have such an increase in online traffic that we need to create rules to bring order into chaos,” said European Commission Vice President Margrethe Vestager, who has been aggressively facing off against American tech companies. 

The crackdown is prompting a surge in lobbying in Europe. 

The draft legislation comes as Europe is also considering major changes to the rules governing how U.S. companies handle E.U. customers data, following a ruling from Europe's highest court that struck down a key data law. American companies and trade groups are aggressively lobbying to shape the rules. Companies had mixed reactions. 

“We are concerned that they appear to specifically target a handful of companies and make it harder to develop new products to support small businesses in Europe,” Karan Bhatia, Google’s vice president of government affairs and public policy, said in a statement. “We will continue to advocate for new rules that support innovation, increase responsibility and promote economic recovery to the benefit of European consumers and businesses.”

Yet Facebook praised the rules for being “on the right track."

Apple declined to comment. An Amazon spokesman pointed to a recent statement that the firm was concerned about “ensuring the same rules apply to all companies.”

Our top tabs

Facebook will lift its ban on political ads in Georgia. But it will continue to bar them throughout the rest of the country.

The change effective today comes ahead of the Jan. 5 Senate runoffs, according to a blog post released by Facebook. Democratic advertisers warned the ban could hurt their chances in the high-stakes runoffs, which will determine which party controls the Senate.

“With early in-person voting already underway for the runoffs, Facebook’s decision to finally lift its harmful ban on political ads in Georgia is long overdue,” Democratic Senatorial Campaign Committee spokesman Stewart Boss wrote in an emailed statement. “These online platforms must focus on rooting out the spread of organic disinformation about our elections, and banning ads is the opposite of a solution.”

The news is a partial win for political advertisers. Because they will only be able to target users in Georgia, campaigns still wont be able to run ads soliciting donations from across the country. 

Google lifted its ban last week for all political ads. Facebook has not said when it will lift its ban in its entirety.

A coalition of states could file an antitrust lawsuit against Google as early as Thursday.

The complaint is expected to accuse Google of changing its search engine to disadvantage specialized search rivals like TripAdvisor and Yelp, Leah Nylen at Politico first reported. The complaint will be led by Colorado Attorney General Phil Weiser (D) and Nebraska Attorney General Doug Peterson (R.) 

The Justice Department filed a lawsuit in October alleging that Googles contracts with cellphone companies like Apple to be the default search engine are exclusionary and reinforce Googles dominance. Republican attorneys general from 11 states signed on to that suit.  

The new Google suit is expected to be filed in the same federal court in D.C. Google says it plans to fight the Justice Department suit.

People affiliated with the French military used fake Facebook accounts to influence African politics. 

The company identified fake Facebook groups, pages and Instagram accounts affiliated with people from France and Russia seeking to influence politics in Africa, Craig Timberg reports.

The takedown is the first time the social media giant has targeted users affiliated with a Western government over suspected inauthentic behavior. Facebook did not have evidence that the French military directed the users. The Russian accounts belong to people once affiliated with Russia’s Internet Research Agency, which interfered aggressively in the 2016 U.S. presidential election

The takedown is also a rare discovery of rival influence operations from two different countries going head to head to influence a third nation, researchers from Graphika and the Stanford Internet observatory noted in a report Tuesday. The accounts from each side accused the other of being fake and posting narratives aimed against each others governments.

The French network included 84 Facebook accounts and several groups and pages that posed as Africans supportive of French military action. The Russian accounts attempted to influence opinions about the Dec. 27 election in the Central African Republic and pushed narratives about coronavirus vaccines.

This shows that the U.S. is, by far, not the country with the worst foreign interference in our politics, said Shelby Grossman, a research scholar at the Stanford Internet Observatory and co-author of the organization’s report on the Russian accounts.

Rant and rave

Airbnb co-founder and chief executive Brian Chesky tells Politicos Carla Marinucci why the company wont join the California exodus.

Transition Tracker

Joe Biden will nominate Pete Buttigieg to be transportation secretary.
President-elect Joe Biden has chosen Pete Buttigieg, a former rival for the Democratic presidential nomination, to lead the U.S. Transportation Department. (Reuters)

The former South Bend, Ind., mayor and presidential candidate would oversee Bidens promises to invest in new transportation and other infrastructure, Michael Laris, Ian Duncan and Seung Min Kim report. As head of the agency, Buttigieg would direct oversight of driverless technology. Safety advocates have urged Biden to take a much more hands-on approach to regulating the emerging technology.

IBM, which works with the airline industry, welcomed the nomination.

“As Congress considers broader, bipartisan infrastructure reform, IBM stands ready to work with the incoming Secretary to modernize our transportation infrastructure and drive economic recovery,” Dee Waddell, IBM global managing director of travel and transportation industries, said in a statement.

Hill happenings

Sen. Lindsey O. Graham (R-S.C.) wants to give Congress an ultimatum over reforming a key tech liability shield. 

The legislation would sunset the decades-old law protecting Internet companies from liability for user content by 2023 if Congress doesnt reform the law. 

“The time has come for these largely unregulated Big Tech giants to either be broken up, regulated, or subject to litigation for their actions,” Graham said in a statement. “It’s time we put the Section 230 protections these companies enjoy on the clock.”

The bill, which is unlikely to pass, serves as a last-ditch fix to satisfy President Trump, who threatened to veto the national defense spending bill if Congress doesnt revise the law. The defense spending bill passed last week with majorities that would allow both chambers to overrule a veto. 

Graham previously introduced the EARN IT Act, which would strip companies of the liability protections if their users share child exploitation material. Democrats have introduced their own plans to update the law.

Internet companies are trying to get ahead of the debate over the law, which will rage into 2021, by forming a new lobbying coalition. Automattic, Cloudflare, Dropbox, eBay, Etsy, Glassdoor, GoDaddy, Medium, Nextdoor, Patreon, Pinterest, Reddit, Snap, TripAdvisor, Vimeo and the Wikimedia Foundation announced yesterday that they were forming a coalition called Internet Works to raise potential consequences of repealing the law to members of Congress.



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