France’s plan to rein in Big Tech (and Ireland and Luxembourg) – POLITICO.eu

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PARIS The French government wants to beef up EU rules for Big Tech and that means wresting power away from Dublin and Luxembourg, the two capitals that have so far been responsible for enforcing them.

According to briefings with French officials and documents seen by POLITICO, Paris plans to rework the EU's content moderation bill so that it doesn't have to rely on other countries' regulators to police and if required, punish the biggest platforms.

Paris does not want to be "completely dependent on the responsiveness, the willingness to move quickly of the country-of-origin's regulator," an official from the economy ministry told reporters Wednesday.

Paris's proposals come just as the EU's economy ministers pore over the EU's content moderation rules and its proposal to curb the largest tech companies' market power known respectively as the Digital Services Act and the Digital Markets Act.

France hopes EU countries will assent to its proposals when it takes over the Council of the EU's rotating presidency in January. The government aims for an agreement on the Digital Markets Act under its presidency, but French Secretary of State for Digital Cdric O acknowledged earlier this week that the Digital Services Act, which is more contentious, might take some more time. On Thursday, O said that France still aimed to take the DSA to the finish line.

"Not everything is a red line [for France], but these proposals are contributions to the debate which we hope can create common ground ahead of the French presidency" of the EU, the economy ministry official said.

In the Digital Services Act, the European Commission kept an EU provision known as the "country-of-origin principle," which states that companies are regulated by the authority of the country they're legally based in. For almost all Silicon Valley giants, that means either Luxembourg or Ireland.

Paris said it does not want to overhaul the principle, but to buttress local regulators alongside the lead authorities, according to amendments seen by POLITICO. That means allowing local regulators to impose interim measures in case of emergency, for example.

French officials, including O, have regularly indicated that the Irish authorities are not doing enough to crack down on U.S. tech giants for potential violations for the EU's data protection rules. They want to ensure the same doesn't happen under the DSA.

"We have learned from the experience of the previous texts currently in force, and we need to invent somewhat innovative mechanisms," an official from O's cabinet told reporters Wednesday, in an apparent reference to the EU's data protection rules, which are governed by the so-called one-stop shop principle that has faced criticism from regulators and EU lawmakers as being inefficient.

On Thursday, O doubled down. "France supports the country-of-origin principle. But it seems to us that the General Data Protection Regulation experience, albeit a great political success, [shows there is a need for] improvements when it comes to cooperation between EU countries," he told reporters.

"We see with GDPR that appeal mechanisms ... and case resolutions are insufficient," he added.

The French government wants the lead regulators to be required to share data with other authorities, with the possibility of reallocating cases "by mutual agreement."

In practice, the reallocation plan would mean national authorities French ones, for example would ask their Irish counterparts whether they plan to investigate any suspected infringement in France by a big platform like Google, Facebook or Twitter (all of which are legally established in Ireland) and would launch an investigation themselves if Ireland doesn't reply within three weeks.

If the Irish authorities do decide to open a probe, they would have to grant access to all the information from the proceedings and involve the French authorities in the final decision. France could also raise a "reasoned objection" if it doesn't like Ireland's initial decision.

The network of EU country representatives the so-called Digital Services Coordinators should settle disagreements between national authorities if one believes action wasn't taken or the outcome of an investigation wasn't satisfactory.

Further, where "serious harm is likely to occur," France argues that local authorities should be able to impose interim measures on online platforms as well as to request an "emergency binding decision" from Digital Services Coordinators, to be adopted within two weeks.

Despite the proposed changes, O said: "France does not want content regulation based on the country-of-destination, but we want to see some form of efficiency."

In addition to empowering its own regulator to police Big Tech, France also wants to impose stricter rules than what the Commission has already proposed, especially those concerning online marketplaces like Amazon and eBay.

Currently, the Digital Services Act requires online marketplaces to collect information about the seller, also known as Know-Your-Business-Customer obligations.

But France is worried the current rules might not go far enough. Other EU countries and the European Parliament agree with Paris, said O, who met with the Parliament's lead negotiator Christel Schaldemose Thursday.

The French government pitches four obligations for online marketplaces, according to a document seen by POLITICO: Ensure consumers have access to the necessary information related to products before the products are put on sale; prevent dangerous or non-compliant goods from being put on sale; ramp up the fight against counterfeit products; and ensure cooperation between national authorities when dangerous products have already been sold.

Online marketplaces would be required to prevent products without the necessary information from being posted online, and to check goods against publicly available databases before they're put on sale to ensure they haven't been flagged as dangerous. They would also be required to warn consumers and arrange recalls if the seller of a dangerous product is unresponsive.

The rules would not apply to micro and small enterprises, and Paris said is willing to be somehow flexible about which online marketplaces the rules would apply to.

"We need to keep in mind that, on product safety issues, we can't afford to have too broad exemptions," said the official from O's cabinet, "we'll have to see whether adjustments on a case-by-case basis are possible."

Alongside its work on content moderation, the French government has also lined up a host of amendments to a separate bill that regulates digital competition, known as the Digital Markets Act. The bill's purpose is to rein the market power of the most powerful companies, which the bill will designate as gatekeepers, and applying specific rules to them to ensure fair competition.

The French plan, seen by POLITICO, including widening the bill's scope to include web browsers (Google's Chrome and Apple's Safari, for example) and voice assistants (Apple's Siri and Amazon's Alexa). It also wants to ensure that the practice of self-preferencing, where a company favors its own product over its competitors, also applies to app stores.

The plan is likely to get backing from Berlin, which has raised similar concerns about web browsers and voice assistants.

In a paper signed with Germany and the Netherlands published Thursday, France called on the Digital Markets Act to be strengthened to require regulators to assess all mergers and acquisitions by gatekeepers. The three countries also want the bill to determine whether a company qualifies as a gatekeeper if it offers "an ecosystem of services."

Paris wants businesses and users to be able to alert the Commission of potential infringements to help with the bill's enforcement. To that end, it proposed a process dubbed a "reporting mechanism" that would facilitate speedy communication between them.

Unlike its efforts with the Digital Services Act, France said it is happy with leaving enforcement of digital competition to someone else, as long as EU countries can request market investigations. The Commission is largely responsible for ensuring fair competition in the bloc.

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France's plan to rein in Big Tech (and Ireland and Luxembourg) - POLITICO.eu