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As US fails to clamp down on Big Tech, Europe shows what progress looks like

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By Jon Swartz

The lack of online protections for young children and teens from Congress’ omnibus spending package stings both lawmakers and consumer rights advocates, especially as Europe’s approach appears to produce results.

In the absence of significant antitrust legislation included in the sweeping $1.7 trillion omnibus spending bill that will close this session of Congress, U.S. lawmakers might want to look overseas, where Big Tech is moving quickly in line with new European laws and repressions.

Amazon.com Inc. (AMZN) this week agreed to settle two antitrust cases with the European Union related to allegations about the retailer’s treatment of third-party sellers on its platform. Microsoft Corp. (MSFT) is complying with European regulators on cloud and Teams-related technologies, according to multiple reports, while Apple Inc. (AAPL) is reportedly laying the groundwork to obey tough new EU rules that allow iPhone owners to choose apps outside of the company’s App Store.

Some U.S. public policy advocates hoped that Big Tech’s recent cooperation with the EU might spur lawmakers here to finally pass antitrust legislation after years of inaction. Despite the bills’ boasts and some solemn hearings aimed at tech executives, legal experts remained skeptical.

There is a big difference between the types of targeted changes implemented [in Europe] and non-self-preference wholesale regimes being considered in the United States,” Geoffrey A. Manne, president and founder of the International Center for Law & Economics, told MarketWatch.

Some of the biggest tech players are bowing to European law and showing a willingness for change, mainly due to the Digital Markets Act, or DMA, which is part of the larger overhaul of laws governing the biggest tech companies. world for more than two decades. The US Senate’s Online Choice and Innovation Act, on the other hand, would impose an ambiguous overarching obligation that would theoretically result in a host of unspecified and wildly sweeping changes.

Learn more about DMA: Landmark European law could take billions from Apple and has already forced major change at Google

The adoption of the DMA has led to a series of swift actions, the latest being Amazon’s negotiation with the EU of some specific changes to its platform, which also follows an investigation started a while ago. a few years ago by the competition department of the European Commission. ., according to Manne. As part of this agreement, Amazon will not pay a fine, but will commit to giving third-party sellers on its digital platform an equal chance of being selected as the default option for Buy Box buttons. from Amazon and allow them to qualify for its Prime shipping program.

Likewise, Apple is forging ahead and developing software to comply with new EU requirements that are expected to come into force in 2024, according to Bloomberg News. Potential changes would give third-party apps such as Google’s mobile wallet and PayPal Holdings Inc.’s (PYPL) Venmo a better chance to compete with Apple’s built-in apps. (Apple is locked in a long legal battle with Epic Games Inc., maker of the popular “Fortnite,” over its App Store rules.)

In depth: Apple has spent decades building its walled garden. He may be starting to crack

Microsoft, meanwhile, continues to work through issues with regulators rather than confronting them as it used to. Last week, acting proactively to avoid formal EU investigations, the software giant announced a phased rollout of its “EU Data Frontier” for cloud customers and responded to EU antitrust concerns over its business practices following a complaint by Salesforce Inc. (CRM) workspace messaging app Slack.

Read more: Microsoft avoided U.S. antitrust scrutiny, but Europe is another matter

Apple, Microsoft and Amazon are only making the changes in Europe, however, while continuing business as usual in the United States, where agencies like the Federal Trade Commission and the Department of Justice are pursuing legal action. instead of new laws that Congress was unable to pass. pass.

Technology laws in Asia, meanwhile, have prompted Apple and others to change the operations of their app store. Earlier this year, South Korean lawmakers approved the rules of a law prohibiting Apple and Google from forcing software developers to use their payment systems, and Apple also changed its app practices in Japan, which worries regulators.

Compliance in Europe highlights the fact that European regulators are years ahead of their American counterparts – and that the tech industry has shown its ability to dodge antitrust measures and other bills in Congress through lobbying and spending. strategic, according to Ed Mills, an analyst at Raymond James.

See you next year, Mills told MarketWatch.

“I don’t doubt these changes [in Europe by Big Tech] will be used by some to try to push for laws in the United States,” Manne told MarketWatch. , I don’t think they should be taken as evidence that the kinds of changes contemplated by the US proposed legislation would be equally acceptable.

Read: What is a platform and what should be done? The answer could determine the future of Apple and the rest of Big Tech

The exclusion of the omnibus spending bill that would dramatically alter the business models of US tech giants has led some US lawmakers and consumer rights advocates to respond with a flurry of statements highlighting their frustration. High-profile bills aimed at protecting children’s online rights and adult privacy also failed to make the cut this year, although a bill levying higher merger fees was included in the bill. the omnibus package.

“We are deeply disappointed and frustrated that Congress is about to end the year without passing the Child Online Safety Act and the Open App Markets Act,” Sens said. Richard Blumenthal, a Democrat from Connecticut, and Marsha Blackburn, a Republican from Tennessee, said in a joint statement Tuesday. “We held months of extremely bipartisan hearings, engaged with broad stakeholder groups, and heard powerful stories of grieving youth and parents hurt by Big Tech’s greed. Big Tech once again wielded its influence insidious through powerful armies of lobbyists and deceptive promotional campaigns, stalling vital efforts to protect children and consumers, and has successfully thwarted reforms to make children safer online and ensure a safer market fair to app consumers.”

Also: US laws protecting children’s online languages ​​behind Europe

The lack of online protections for young children and teens — seen as the surest bet among tech bills to make it into the omnibus package — has particularly stung lawmakers and policy buffs.

“Common Sense Media is disappointed that Congress is ending the year without taking any action to establish necessary online protections for children and teens and their families,” the association’s CEO, James Steyer, said in a statement. . “With a national youth mental health crisis and the role media and technology play in that crisis, Congress has failed to come to the aid of children and teens.”

Read more: Bills target Apple, Google and Facebook as US tries to catch up with European big tech push

-Jon Swartz


(END) Dow Jones Newswire

24-12-22 0928ET

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