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The European Commission’s Regulatory Scrutiny Board has approved the EU’s proposed rules to limit tech giants’ power. Nevertheless, the watchdog has highlighted a couple of shortcomings.

According to the Board, the proposal should better justify the identification and selection of core platform services. “It should present evidence of what determines persistent misuse of gatekeepers’ power vis-a-vis dependent business users and customers”, Reuters quotes. “It should consider the negative consequences of curtailing the size advantages following from network economies and economies of scale for consumers”, the Board goes on to say.

Digital Services Act and Digital Markets Act

The European Union announced its official plans for the Digital Services Act and Digital Markets Act last week. With the legislation, the EU wants to prevent unfair competition in the tech market and protect users’ online rights.

The Digital Services Act aims to protect consumers who use the products of large tech companies. For example, companies must be more transparent in the algorithms they use to display advertisements. The Digital Markets Act is intended to prevent large tech companies from being unfairly competitive and pushing smaller players out of the market. An example of this is banning pre-installed apps that cannot be removed from a device.

If the large tech companies break the rules, they risk severe punishment. This can amount to up to 10 percent of the global revenue or, if necessary, split up the company. It will probably take another year or two before the new rules are fully assessed and in force.

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