Big Tech Faces Ban From Favoring Own Services Under EU Rules

Natalia Drozdiak, Bloomberg News

A visitor passes a sign featuring Google Inc.'s logo inside their U.K. headquarters at Six St Pancras Square in London. Photographer: Chris Ratcliffe/Bloomberg , Photographer: Chris Ratcliffe/Bloomberg

(Bloomberg) -- Big tech firms could be banned from preferencing their own services in search rankings or exclusively pre-installing their own applications on devices, under new regulations planned by the European Union.

As part of the EU’s Digital Services Act, platforms with power to control could also have to share customer data with business rivals, according to internal draft documents obtained by Bloomberg.

Due to be unveiled in December by the European Commission, the bloc’s executive body, the legislation will seek to modernize rules governing the internet to give platforms greater responsibility for what users post on their sites as well as propose regulation aimed at curbing the power of large platforms.

The initiative comes as big giants such as Apple Inc. and Alphabet Inc.’s Google offer services across a widening array of sectors and as competitors increasingly rely on their platforms to offer their own services. Apple has faced heat over policies with its app store, which companies like Spotify Technology SA complain give an unfair advantage to the iPhone maker’s rival music service.

The EU says in one of the documents it wants to “constrain unfair behavior” by digital gatekeepers, the platforms that other businesses depend on to get access to customers. One policy option describes a blacklist of unfair practices for platforms in several key sectors, including marketplaces, app stores and social networks as well as online search engines, operating systems and cloud services.

A separate document outlining the potentially unfair practices says gatekeepers “shall not provide preferential display in online search engines or online intermediation services for their own services” and that “gatekeepers shall not pre-install exclusively their own applications,” nor restrict users from un-installing any of the apps.

The commission’s antitrust arm has previously sought to tackle some of the issues highlighted in the document, including through several cases against Google. In 2017, it fined the search giant for unfairly promoting its own shopping service in search results. In 2018, the EU fined the company over its conduct with its Android mobile operating system, including paying phone makers to pre-install Google search.

Competition law has failed to sufficiently address all the systemic problems in the platform economy, the EU has said, which is why it’s exploring legislation in the area.

The document outlining unfair practices also says gatekeepers could be prohibited from using data collected on their platform for their own commercial services unless they share it with business users active in the same area. Amazon.com Inc. is currently being investigated by the EU’s antitrust watchdog on concerns it misuses merchants’ data to compete with its own sellers on its website.

In addition, platforms that provide advertising services, like Facebook Inc. and Google, shall submit to an annual audit of their advertising metrics, the document says.

The outlined measures are still at an early stage and could differ in the final proposal, which itself which would still need agreement from the bloc’s member states and the European Parliament before it enters into force -- a process that can take years.

A commission spokesman declined to comment.Politico and the Financial Times reported about the leaked documents earlier.