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France’s plan to contain Big Tech (and Ireland and Luxembourg) – POLITICO



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PARIS – The French government wants to strengthen EU rules on big tech – and that means wrestling power from Dublin and Luxembourg, the two capitals that have so far been responsible for enforcing them.

According to briefings with French officials and documents viewed by POLITICO, Paris plans to revise the EU content moderation law so it doesn’t have to rely on other countries’ regulators to oversee and, if necessary, punish the largest platforms.

Paris does not want to make itself “completely dependent on the ability to react and the willingness to act quickly on the part of the regulatory authority in the country of origin,” an economic ministry official told reporters on Wednesday.

The Paris proposals are just coming as EU economics ministers ponder EU content moderation rules and their proposal to curb the market power of the largest tech companies – known as the Digital Services Act and Digital Markets Act, respectively.

France hopes EU countries will approve its proposals when it takes over the council of the rotating EU presidency in January. The government is aiming to reach an agreement on the Digital Markets Act under its presidency, but French State Secretary for Digital Technology Cédric O admitted earlier this week that the more controversial Digital Services Act could still take some time to complete. On Thursday, O said France still intends to get the DSA to the finish line.

“Not everything is a red line [for France]but these proposals are contributions to the debate that we hope can create common ground in the run-up to the French EU presidency, “said the economic ministry official.

In the Digital Services Act, the European Commission has retained an EU rule known as the “country of origin” principle, which states that businesses are regulated by the authority of the country in which they are legally based. For almost all Silicon Valley giants, either Luxembourg or Ireland.

Paris said it does not want to revise the principle but rather support local regulators alongside the lead authorities, according to the changes seen by POLITICO. This means that the local supervisory authorities can, for example, impose temporary measures in an emergency.

Not a one-stop shop this time

French officials, including O, have regularly warned that the Irish authorities are not doing enough to crack down on US tech giants for possible breaches of EU data protection rules. You want to make sure the same thing doesn’t happen under the DSA.

“We have learned from experience with the previous texts that are currently in force and we need to invent some innovative mechanisms,” an official from O’s cabinet told reporters on Wednesday in an obvious reference to EU data protection legislation that through the so-called one-stop-shop principle, which has been criticized by regulatory authorities and EU legislators as inefficient.

O doubled on Thursday. “France supports the country of origin principle. But it seems to us that the General Data Protection Regulation – albeit a great political success – [shows there is a need for] Improvements in cooperation between EU countries, “he told reporters.

“We see with the GDPR that grievance mechanisms … and case-solving are inadequate,” he added.

The French government wants lead regulators to be required to share data with other authorities with the ability to reassign cases “by mutual agreement”.

In practice, the reallocation plan would mean that national authorities – French for example – would ask their Irish counterparts whether they intend to report suspected violations in France through a major platform such as Google, Facebook or Twitter (all of which are legally based in France) investigate Ireland) – and would initiate an investigation itself if Ireland does not respond within three weeks.

Should the Irish authorities decide to open an investigation, they would have to give access to all information from the proceedings and involve the French authorities in the final decision. France could also raise a “reasoned objection” if it did not agree with Ireland’s original decision.

The network of EU country representatives – the so-called digital services coordinators – should resolve disagreements between national authorities when it is considered that no action has been taken or the outcome of an investigation was unsatisfactory.

Furthermore, France argues that in cases where “serious harm is likely”, local authorities should be able to impose temporary measures on online platforms as well as request a “binding urgency decision” from the digital services coordinators, which is accepted within two weeks.

Despite the proposed changes, O said, “France doesn’t want content regulation based on destination country, but we want some form of efficiency.”

Stricter rules for online marketplaces

In addition to empowering its own regulator to oversee big tech, France wants to impose stricter rules than the Commission has already proposed, particularly with regard to 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.

However, France fears that the current rules may not go far enough. Other EU countries and the European Parliament agree with Paris, said O, who met Parliament’s chief negotiator Christel Schaldemose on Thursday.

According to a document consulted by POLITICO, the French government has four obligations for online marketplaces: ensure that consumers have access to the necessary information on products before the products are put on sale; prevent dangerous or non-compliant goods from being offered for sale; step up the fight against counterfeit products; and ensuring cooperation between national authorities when dangerous products have already been sold.

Online marketplaces would need to prevent products from being put online without the required information and compare goods to publicly available databases before selling them to ensure that they have not been classified as dangerous. You would also need to warn consumers and initiate recalls if the seller of a dangerous product fails to respond.

The rules would not apply to micro and small businesses, and Paris was willing to be kind of flexible about which online marketplaces the rules would apply to.

“We have to keep in mind that we cannot afford too broad exemptions when it comes to product safety,” said the official from O’s cabinet. “We have to see whether adjustments can be made on a case-by-case basis.”

German alliance for competition

In addition to its work on moderating content, the French government has also tabled a number of changes to a separate bill regulating digital competition, known as the Digital Markets Act. The bill aims to curb the market power of the most powerful companies, referred to as gatekeepers in the law, and apply specific rules to them to ensure fair competition.

The French plan, seen by POLITICO, includes expanding the scope of the bill to include web browsers (e.g. Google’s Chrome and Apple’s Safari) and voice assistants (Apple’s Siri and Amazon’s Alexa). It also wants to ensure that the practice of self-preference, in which a company prefers its own product over its competitors, also applies to app stores.

The plan is likely to be backed by Berlin, which has raised similar concerns about web browsers and voice assistants.

In a paper signed with Germany and the Netherlands and released on Thursday, France called for a tightening of the Digital Markets Act to oblige regulators to evaluate all mergers and acquisitions by gatekeepers. The three countries also want the bill to determine whether a company is considered a gatekeeper if it offers “an ecosystem of services”.

Paris wants businesses and users to be able to inform the Commission of potential violations to help enforce the law. To this end, she proposed a process known as the ‘reporting mechanism’ which would allow them to communicate quickly.

In contrast to its efforts to get the digital services law, France said it was happy to leave the enforcement of digital competition to someone else as long as EU countries can request market surveys. The Commission is largely responsible for ensuring fair competition in the EU.

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