Samsung Also Within the Scope of EU Big Tech Regulations

Urging Content Management for Top 10 Global Companies
10% Annual Global Revenue Fine for Violations

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The European Union (EU) has introduced a new regulatory proposal aimed at curbing the market dominance of the world's top 10 big tech companies, including Samsung Electronics, and urging content management. The EU executive branch, the European Commission, warned that violations of this proposal could result in fines of up to 10% of the companies' global annual revenue or even demands for corporate breakups.

According to the Wall Street Journal (WSJ) on the 15th (local time), the EU Commission proposed drafts of the 'Digital Markets Act' and the 'Digital Services Act' containing these provisions. These new regulations target all digital services such as social networking services (SNS), online marketplaces, and other online platforms, focusing on so-called digital 'gatekeeper' companies.

AFP news agency, citing key sources, reported that the top 10 gatekeepers include the U.S. companies Facebook, Google, Amazon, Apple, Microsoft (MS), Snapchat; South Korea's Samsung Electronics; China's Alibaba and ByteDance; and the Netherlands' Booking.com.

The Commission first prohibits unfair practices where IT giants use their affiliates to grant mutual benefits under the Digital Markets Act and requires them to notify EU authorities of acquisition or merger plans. According to this bill, companies like Google and Apple must allow users to delete pre-installed apps on hardware devices and provide advertising-related metrics such as app usage frequency free of charge to advertisers and distributors. Failure to comply could result in fines of up to 10% of global annual revenue and orders to divest specific businesses. Considering the revenues of major companies, the fines are expected to reach tens of trillions of won. An EU official stated that if companies violate these regulations, the Commission could even order corporate breakups.

Another bill, the 'Digital Services Act,' targets large online platforms and strengthens responses to swiftly remove illegal or harmful content posted in sensitive areas such as elections and public health. Violations of this regulation could result in fines of up to 6% of the company's annual revenue.

This bill is expected to be implemented after approval by EU member states and the European Parliament. Some parties advocate for stronger regulations, while others express concerns about excessive regulation. It is anticipated that the final draft could take anywhere from a few months to several years to be completed.

Margrethe Vestager, EU Commissioner for Competition, stated, "The ultimate goal of the two bills is to enable users to safely choose from a variety of products online," adding, "Companies operating in the EU must compete fairly online just as they do offline." She further expressed hope that the bills would be approved as soon as possible.

Meanwhile, Google issued a statement saying it would carefully review the EU Commission's proposal but expressed concern that the proposal appears to specifically target a small number of companies.