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European regulators in Italy, France, Germany and the United Kingdom rein in Big Tech

A protest against the multinational technology company Amazon during the Covid-19 pandemic on November 27, 2020 in Rome, Italy.

Antonio Masiello | Getty Images News | Getty Images

When Italy's competition authority last month fined Amazon 1.13 billion euros ($ 1.28 billion), it was just the latest salvo in a series of moves against Big Tech.

The watchdog, Autorita Garante della Concorrenza e del Mercato, stepped up its actions over the past year with a barrage of rulings against e-commerce giant, Alphabet's Google and Facebook owner Meta, to name a few.

In the case of Amazon's latest fine, the regulator took issue with the company urging Italian sellers to use its own logistics service, Fulfillment by Amazon, which the watchdog said was an abuse of its dominant position. It's an accusation that Amazon denies.

Renaud Foucart, a senior economics lecturer at Lancaster University in the UK, told CNBC that the significant monetary sanction on this occasion is part of a tendency for national regulators to take action against Big Tech companies because broader investigations at EU level may be "very slow."

"The national regulators want to show that they are active, that they are actually doing something," he said.

AGCM has been very active. During 2021, it levied numerous fines against large U.S. technology companies. In a separate case, it fined Amazon and Apple for alleged anti-competitive cooperation. It fined Google 102 million euros for "abuse of a dominant position" in its car software product, and in February, Facebook fined Facebook 7 million euros for its use of data.

The sanctions vary widely in size, but have a similar message: National regulators will intervene in their home markets.

But regulators like AGCM will not go without challenging their decisions. Amazon shot back at the order and plans to appeal the $ 1.28 billion fine.

"The proposed fine and remedies are unjustified and disproportionate," a spokesman said.

Regulator capacity under pressure

Maria Luisa Stasi, a senior legal officer at Article 19, a non-governmental organization for digital rights, said it is not surprising that some national watchdogs, such as those in Italy as well as France and Germany, have taken their own initiative. to go so strongly against Big Tech.

"Certain competition authorities in Europe are much more likely to go after sectoral or market investigations where they believe there is an environment where there may be some problems instead of waiting for complaints to come in," she said.

It is no coincidence, she added, that these studies are happening in markets with larger populations that have more developed digital audiences and consumers.

"In a number of the biggest cases we are seeing in Europe at the moment, they have been supported, if not initiated, by consumer associations or individuals who have joined forces," she said. "It's more of a push from the bottom up."

But, she said, there will be problems with budget, resources and capacity, with regulators of all kinds facing obstacles with ever-increasing digital workloads.

Searching for evidence and data, especially in the case of Big Tech's large and global companies, requires a great deal of elbow grease, which can strain budgets and know-how.

"If you put a number of protocols or codes on my desktop, I'm not able to tell you if that software has been an instrument of a cartel or not because I'm not able to read it. slow down the process. a lot. "

She said she is in favor of regulators taking temporary action against companies, for example by ordering a halt or restriction of a particular activity during an investigation instead of waiting until the investigation is completed, which could take years.

Other competition watchdogs have set up specialist units to address Big Tech. The UK Competition and Market Authority, which has also accelerated its own actions against major digital players, last year set up a dedicated technology unit to investigate digital giants. Most notable is that the CMA is locking horns with Facebook over their Giphy acquisition.

Major overhaul underway in Europe

While people like AGCM have acted on their own, the dynamics of competition regulation in Europe, especially around Big Tech, are undergoing a significant overhaul.

The Digital Markets Act is a comprehensive set of new EU rules that are still in the making, but are approaching the finish line. It will be a high priority for the Council of the European Union, where government ministers will meet to adopt laws currently led by France.

The DMA will tighten the rules for large tech companies - so-called gatekeepers - that are dominant in the market to prevent abuse. It will also introduce greater control over merger and acquisition agreements.

The European Commission, the EU's executive arm, will conduct investigations into the abuse or misdeeds of these gatekeepers.

Luisa Stasi said the issue of capacity and resources also hangs over the DMA.

"Almost everything will be on the Commission's desk. Will the Commission be able to do that? Again, a capacity problem," she said.

Meanwhile, other national regulators - whether in competition law or other areas such as privacy and data protection - continue to act.

"The Germans have been very active, the French have been very active in the past," said Foucart of Lancaster University.

In the first week of January, France's data watchdog CNIL fined Google and Facebook 150 million euros and 60 million euros, respectively, for their use of cookies, while Germany's federal antitrust office investigates Google under newly granted powers.

But many regulators need to buckle in the long run, he added.

"If you find [against] one of the big companies, you still have to win in court later. They can appeal at European level. "

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