The governing body of the European Union is proposing even more guards against the power of web-based search engines and e-commerce operators, Google, Facebook and Amazon presumably chief among them, as the effective date of a strict data privacy law nears.
The European Commission said it wants to provide “small businesses with a safety net in the digital economy” by increasing operations transparency, improving dispute mediation and setting up a new “EU Observatory” in order to monitor the digital economy more closely.
“Depending on the progress achieved and based on the insights gained through the EU Observatory, the commission will assess the need for further measures within three years,” the commission said.
“Millions of mostly small traders in the EU now depend on online platforms to reach their customers across the digital single market,” commissioner Andrus Ansip said. “These new online marketplaces drive growth and innovation in the EU, but we need a set of clear and basic rules to ensure a sustainable and predictable business environment. Today’s proposal brings more transparency to the online economy, gives businesses the predictability they need, and will ultimately benefit European consumers.”
Commissioner Mariya Gabriel echoed the importance of search engines and marketplaces to the EU economy, but added: “We must make sure they are not abusing their power.”
“Ensuring that platforms and search engines treat other businesses fairly is critical including for promoting trust in online platform environment in the EU,” Gabriel said.
The commission noted that a recent survey found 42 percent of small and medium companies in the EU work directly with online platforms, and about half of those experience some kind of problem that is estimated to cause the loss of 1.27 billion euros to 2.35 billion euros in sales a year.
Transparency looks to be the biggest push, at the moment, with the new proposal calling for digital platforms to ensure usage terms and conditions are “easily understandable and easily available,” and to implement a “reasonable minimum notice period” for changes to terms and conditions, while also demanding that platforms “formulate and publish” policies on data. This will include information on what user data can be accessed “by whom and under what conditions,” and when it comes to third-party partners on marketplaces, how those platforms use contracts to “demand the most favorable” prices. When it comes to search engines, they will be required to “set out the general criteria that determine how goods and services are ranked in search results.”
All of these proposed actions stem from two years of digital market research by the commission and tie in with actions it has taken against operators like Google, Amazon and Facebook, on issues like taxes, advertising power and even search result preferences.
The General Data Protection Regulation, proposed in 2012 and approved by EU parliament in 2016, is set to take full effect next month. The rule basically protects all personal data for individuals inside the EU from foreign companies like Google and Facebook. It also aims to give people more knowledge and control over their data by requiring collecting companies to disclose what data is being collected and get specific consent for each form of usage, disclose how long it will be retained and offer direct contact information for a data protection officer within the company. It also grants individuals the right to access their personal data and to information of how it’s being used, as well as the “right to be forgotten” or have certain data removed altogether.
If a company is found to be in violation of GDPR, sanctions can be up to 20 million euros or 4 percent of a company’s global annual revenue, whichever is greater. Google and Facebook have unsurprisingly been proactive about addressing the changes, with all saying they are ready to comply.
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