Tech groups find flaws in EU online proposal

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U.S. technology firms are voicing major concerns with a European proposal unveiled Wednesday that they say could discourage the creation of new online business and target U.S. companies. 

The European Commission unveiled a 16-point plan meant to ease the flow of online commerce across the continent, rather than having it siloed in individual countries. 

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“Today, we lay the groundwork for Europe’s digital future,” Commission President Jean-Claude Juncker said. “I want to see pan-continental telecoms networks, digital services that cross borders and a wave of innovative European start-ups.”

While technology groups have applauded aim of the proposal, they took issue with certain pieces of it.

One of the moves calls for a full review of search engines, social media platforms and app stores. The commission wants to explore more regulation on how companies use information, their pricing policies and the transparency of their search results. It also wants to determine if these companies are steering customers away from competitors in favor of their own services and what can be done about it outside current anti-trust law. 

The Information Technology Industry Council has noted that leaked documents showed nearly all the businesses that the commission wants to review are major U.S. tech companies — from Amazon and Yahoo to Microsoft and Google. 

European regulators have already levied anti-trust charges against Google for prioritizing its own services over competitors. 

“Instead of enhancing integration, the commission would in effect be creating a digital fortress around Europe – a move that would have devastating consequences for Europe’s efforts to spur innovation and technology by its own companies,” Dean Garfield, the group’s president, wrote in an op-ed

The group asserted current law is already sufficient to crack down on abusive behavior. 

The Center for Democracy and Technology noted that the “platforms” being discussed are not well defined, and the proposal “could very well discourage the very development of the new enterprises and business models the commission seeks to foster.”

The Computer and Communications Industry Association (CCIA) said that European companies could be hit hardest by new regulations on online platforms. 

“Large international platforms would only be bound by these rules once they already have big legal departments,” said James Waterworth, the group’s European vice president. 

Another section of the commission’s proposal would help standardize copyright rules across the 28 European countries. But critics raised concerns with a proposed requirement that Internet companies monitor and remove third-party content that could be infringing copyrights. Critics said the proposal should be taken with great caution.  

CCIA said the proposal could “destabilize the delicate balance between freedom of speech, an open economy and security concerns.”

The proposal, which will be considered at a European Council meeting in June, is a long way from being enacted. In a release, the group was hopeful the proposals could be in place by 2016. The plan contains a number of other proposals, including the start of an anti-trust investigation into the European e-commerce sector to determine whether companies are restricting trade across countries.