EU threatens to fine tech giants if they leave Europe

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EU Commissioner Margrethe Vestager has said she would investigate whether the EU can impose fines on tech giants when they withdraw from the market. The companies are threatening to do so following rumours that the EU wants to make the tech giants pay for displaying search results with parts of news stories.

Vestager wonders whether it is legal for a dominant provider to stop providing services, writes Bloomberg. In this way, she hopes to prevent a similar situation to what happened in Australia.

Compensation for text in search results

The Australian government decided earlier this year that companies like Google and Facebook must pay a fee to media that appear in their search results. This fee would apply even if only a snippet of text or a title is shown. Both Google and Facebook actively protested against this decision by removing such links from their websites. Google no longer showed news items from Australian media, and Facebook no longer allowed news items to be shared in Australia. This had a drastic effect on the number of visitors to Australian news sites.

Facebook now appears to have reached a deal and promises to bring back the possibility of sharing news items to its platform one of these days. Both Facebook and the Australian media companies have not shared details about the agreement.

EU looking at similar rules

Despite the messy situation in Australia, the European Union is also in favour of such regulations. A coalition of European media companies has asked the EU to investigate whether such legislation is also feasible in Europe. Microsoft also supports this move, in its own words to protect journalism, but possibly also because Google’s exit from a market would benefit its own Bing search engine.

To prevent such legislation from encouraging companies like Google to withdraw from the European market, the EU is looking at rules that would prohibit this. Whether the tech giants actually intend to do this is not clear. After all, the European market is a lot bigger than Australia. Moreover, Google has already made a 76 million euro deal with French media companies to be allowed to show results from French media in search results.