EU Considers Creating Powerful Regulator to Oversee Web Platforms

The European Union is considering creating a powerful new regulator to oversee a swath of mainly US-based Internet platforms, according to an internal policy document that lays bare the deep concerns in top EU policy circles around the threat posed by companies like Google and Facebook. Such a move would be the biggest hurdle yet for US Internet firms operating in Europe, many of which are already facing investigations and lawsuits over issues ranging from unfair competition to tax avoidance.

The document, prepared in February by senior officials for the EU’s Digital Commissioner Günther Oettingerl, is a long way from becoming policy. Its analysis would need to be converted into proposals by the European Commission -- the EU’s executive arm -- and approved by national governments and the European Parliament. But it offers a long-term blueprint for the regulation of Europe’s digital sector that goes far beyond a general plan for the region due to be announced in May, which calls only for a “comprehensive investigation” into the role of Internet platforms. The February paper warns that some online platforms -- such as search engines, online marketplaces and social networks -- “are transforming into super-nodes that can be of systemic importance for the rest of the economy.” Only a very limited part of the economy will not depend on them in the near future,” it says. It lists 32 examples of such platforms, all but five of which are US-based, and only one based in Europe -- Swedish music-streaming service Spotify AB. The paper warns that a lack of transparency around how these platforms operate allows them “to exploit asymmetric positions on the market at the expense of other market operators and consumers,” potentially putting “the whole European economy at risk.”