Big Tech Faces 'Glass-Steagall Moment' in Europe
Big tech companies like Google and Apple will soon face sweeping new regulations in Europe.
As The Wall Street Journal noted in a report Sunday (Aug. 20), the new laws mark the largest expansion of regulations ever seen in the west, similar to the restrictions imposed on the financial sector after the market crashes in 1929 and 2008.
“This is a Glass-Steagall moment for big tech,” Brian Wieser, a tech analyst and former investment banker, told the WSJ, referring to the 1933 banking law. “They’re going from effectively no regulation to heavy regulation.”
The report notes that some of the changes will go into effect right away, impacting the way users search and shop, while others could take years to be felt.
The WSJ outlines a number of measures Big Tech firms have undertaken as the new regulations approach. For example, there’s Google’s planned “choice screen” for smartphone web browsers to increase competition against its Chrome, and Amazon’s new channel that lets customers flag potentially illegal goods and content.
The first new law to roll out is the Digital Services Act, set to go into effect on Aug. 25. It requires companies designated as “large online platforms” to share data with authorities, follow a code of conduct and carry out risk management and independent auditing.
As PYMNTS reported in April, these companies are: Google Search, Google Maps, Google Shopping, Google Play and YouTube, owned by Alphabet; Facebook and Instagram, owned by Meta Platforms; Microsoft's Bing and Linkedin; Amazon Marketplace and the Apple App Store.
Also on the DSA list is Alibaba-owned AliExpress, as well as Pinterest, Snapchat, TikTok, Twitter/X, Wikipedia, Zalando and Booking.com. Some companies have pushed back against this designation, with Amazon filing a court challenge last month.
“The DSA was designed to address systemic risks posed by very large companies with advertising as their primary revenue and that distribute speech and information,” Amazon said in a statement provided to PYMNTS.
“We agree with the EC’s objective and are committed to protecting customers from illegal products and content, but Amazon doesn’t fit this description of a ‘Very Large Online Platform’ (VLOP) under the DSA and therefore should not be designated as such.”
“The scope of the DSA is very clear and is defined to cover all platforms that expose their users to content, including the sale of products or services, which can be illegal,” a spokesperson for the European Commission told PYMNTS. “For marketplaces as for social networks, very wide user reach increases the risks and the platforms’ responsibilities to address them.”
Zalando also disputes the VLOP designation, arguing in court that the European Commission did not consider the “majority retail nature of its business model.”
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