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Europe threatens technology companies with fines or dismantling

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The European Union has threatened technology companies with fines or dismantling for breaking the rules, according to statements by Thierry Breton, head of digital technology in the European Union.

Breton said tech giants who violate new EU rules – aimed at curbing their powers – could face fines, be asked to change their practices, or be forced to break up their European companies.

Britton’s comments come two weeks ahead of the scheduled submission of draft rules known as the Digital Services Act (DSA) and the Digital Markets Act (DMA).

The new draft rules are likely to affect major American players, such as Google, Amazon, Facebook, Microsoft, and Apple.

The Digital Services Act obliges tech companies to explain how their algorithms work, open their advertising archives to regulators and researchers and do more to tackle hate speech, harmful content, and counterfeit products across their platforms.

The Digital Markets Act targets technology companies that control access to platforms with a list of requirements, such as sharing certain types of data with competitors and regulators, as well as prohibited practices, such as favoring their own services.

The new draft rules also include a set of penalties, and Britton said we start with a fine, then a bigger fine, and then you may have temporary treatment, specific treatments, and structural separation.

He added, “We have the fines and dismantling, but of course only in the European market, and forcing companies to dismantle will be the last resort.”

He explained that dismantling or structural separation is not a goal but an option to ensure that there are other means to act if needed.

“The major technology companies seeking the acquisition may also be required to inform the European Commission (the European Union’s executive body) of its intentions,” Britton said.

“These companies may have an obligation to inform us only of what they want to do, and then we will see whether these companies fulfill all their obligations,” he added.

The planned laws are still far from going into effect, and the European Commission will have to negotiate with EU countries and the European Parliament to agree on the final legislation, a process that could take a year or two.

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