European lawmakers voted to spruce up legislation aimed at tech giants to put a stop to unfair business practices, according to a Reuters report.
The draft legislation targets companies such as Amazon, Google and Apple. A European Parliament committee voted in favor of making the law stronger. It includes proposals to require companies to set up Chinese walls (information barriers) between subsidiaries, and to make them acquire merchants’ consent before making use of data.
The proposed legislation would also give authorities more power to punish rule breakers, and include a blacklist of unfair trading practices. The legislation aims to stop unfair business practices from eCommerce and hotel booking sites, search engines and app stores to ensure an equal playing field between tech companies and traditional businesses.
Danish lawmaker Christel Schaldemose, the lead parliament negotiator, said the legislation is a step toward ending the unfair practices.
“We have managed to introduce key improvements to the Commission’s proposal that prohibit unfair practices, remove loopholes and safeguard fairness in the relationships between business users and online platforms,” she said. “Unfair platform-to-business trading practices have no place in Europe.”
Another lawmaker, European Competition Commissioner Margrethe Vestager, is investigating how Amazon takes merchants’ data and makes copycat products. Schaldemose proposed the idea of Chinese walls, which also targets Amazon.
Lawmakers highlighted a few unfair practices, such as retroactive contractual clauses and clauses that hinder companies from ending agreements with online platforms.
The next step will be for the European Parliament and the European Commission, along with EU countries, to try and find a common ground before the proposals become law.
The proposed legislation, called platform-to-business regulation (P2B), has been criticized by tech companies as a myopic solution to a complicated sector.
Morgan Reed, president of U.S.-based ACT | The App Association, app makers’ leading industry body, said the law would be detrimental to his industry.
“The text adopted in committee at the Parliament today risks damaging the competitiveness of app developers in the EU,” he said, “and as a result could stifle growth in a sector worth an estimated 63 billion euros ($71 billion) a year to Europe’s economy.”