The dominance of the stronger, louder or more nefarious on the Internet is soon to come to an end in the EU. On Thursday, the Council of the EU states determined its negotiating position on two groundbreaking laws: the Digital Markets Act (DMA) and the Digital Services Act (DSA). Both together could significantly change the internet. Tech giants such as Google and Facebook will have more obligations imposed on them under threat of heavy penalties and consumers' rights will be better protected. As with data protection, the EU could set global standards. But it's not that far yet.

What exactly is at stake?

It has been 21 years since the EU established comprehensive rules for digital services and online platforms. During this time, not only Amazon, Facebook and Google have grown into huge corporations. Today, social networks are also flooded with hate speech or fake news campaigns and marketplaces with counterfeit goods. To counter this, the EU Commission proposed a major digital package consisting of the DMA and DSA in December 2020. The Digital Markets Act is intended to limit the market power of digital giants such as Google, Facebook and Amazon. The Digital Services Act addresses social issues, such as dealing with illegal content online.

The ministers responsible for the internal market and competition voted on the entire package on Thursday. French Minister Cédric O spoke of an almost historic day. Ireland's Robert Troy called it a milestone.

What is the position of the EU states in detail?

In principle, the EU member states are close to the EU Commission's proposals. The DMA is aimed at gatekeepers, which have a significant impact on the internal market. The EU states stipulate that platforms such as search engines or social networks with at least 45 million active monthly users in the EU or 10,000 annual business customers are included. The threshold for annual turnover is 6.5 billion euros.

The EU member states want these gatekeepers to be able to uninstall pre-installed apps on their own devices, among other things. Gatekeepers are also no longer allowed to give their own products and services preferential treatment over those of competitors - this would affect Amazon, for example. In addition, they are not allowed to prohibit competitors from offering the same product cheaper elsewhere.

All of this is to be enforced by the EU Commission. However, at Germany's insistence, among others, the national competition authorities should also be able to launch investigations and pass on their findings to the Brussels authority. The potential penalty for infringements is up to ten percent of annual turnover. "Structural remedies" - such as splitting up the company - should only be imposed in absolutely exceptional cases.

And what about the Digital Services Act?

Here too, the EU member states are sticking very closely to the EU Commission's proposal. In principle, everything that is prohibited offline should also be prohibited online - such as the sale of counterfeit products or illegal hate speech. The larger the platform, the more rules it has to comply with. What is new is that the EU member states want to ban so-called manipulative "dark patterns" on marketplaces, which are intended to manipulate consumers and pressure them into making a purchase decision. The German government had also campaigned for this. The DSA provides for penalties of up to six percent of annual turnover.

Germany is not fully satisfied - why?

In recent years, Germany has taken the lead in combating hate, hate speech and terrorist propaganda with the Network Enforcement Act, among other things. Now the current German government has supported both the DMA and the DSA position - but has issued an additional declaration for each. With regard to the DSA, State Secretary Claudia Dörr-Voß cited, among other things, the fear that the protection of children and young people in the media could be weakened. Deletion obligations and deadlines for very large online platforms should also be made stricter. With regard to the DMA, she emphasized that the national competition authorities must be effectively involved. It would also be better to concentrate on a small number of gatekeepers rather than making the circle too large. Germany is relying on the upcoming negotiations with the European Parliament for further changes.

What are the reactions?

The digital association Bitkom welcomed the positions. These are "largely balanced", said Managing Director Bernhard Rohleder. The DSA improves consumer protection and ensures clear, harmonized rules for providers of digital services and online platforms. The DMA provides "important new impetus for fair competition in the EU". However, the rules take too little account of the impact on European platforms, start-ups and cybersecurity issues.

The European consumer association Beuc also sees light and shade. One negative aspect is that gatekeepers are not forced to open up social media and messenger services to competitors. Users who do not like Whatsapp would have little choice because most of their contacts use the service belonging to Facebook. The DSA guidelines for online marketplaces are also inadequate.

European press publishers' associations criticized the fact that the protection of European media content against "arbitrary deletions and blocking" on digital platform services was not guaranteed. "The freedom and diversity of the media must be protected from unilateral and sometimes abusive decisions by platform providers, particularly on the basis of their general terms and conditions."

There has already been headwind from the corporations in recent months. Apple, for example, criticized that the DMA could jeopardize the security and privacy of iPhone users if apps from other platforms were forced to be downloaded. Facebook warned against overly strict political guidelines that threatened to stifle innovation.

What happens now?

Before DMA and DSA become a reality, the EU member states and the Parliament still have to agree on a common line. To do this, the Parliament must first establish its own position. This should happen in mid-December. The negotiations should then be concluded in the first half of 2022.