EU digital director Thierry Breton said on Wednesday that tech giants that violate new EU regulations designed to limit their power may face fines, be ordered to change practices and even be forced to dissolve their European operations.

Breton’s comments came two weeks before he proposed the current draft regulations. The draft regulations are called the “Digital Services Act” (DSA) and the “Digital Market Act” (DMA), which may affect the major US companies Google, Apple, Amazon, Facebook and Microsoft.

DSA will force technology companies to explain how their algorithms work, open up their advertising files to regulators and researchers, and do more to address hate speech, harmful content and counterfeit products on their platforms.

DMA targets online gatekeepers that have a set of requirements, such as sharing certain types of data with competitors and regulators; and illegal behavior, such as preference for their own services. It will also include a series of sanctions.

“We first impose a fine, and then a larger fine, and then you may have a temporary remedy, a specific remedy, and then you may end up owning what we have in the competition rules, structural separation, “Breton told reporters at an online briefing.

He said: “Therefore, from fines to resignations, but of course only in the European market.”

EU Internal Market Commissioner Breton said that forcing the company to dissolve would be the last option.

He added: “Structural separation is not the goal, it is not my goal. It is just a means to ensure that we also need to take action.”

Breton said that large technology companies seeking to acquire may also have to inform the European Commission of their intentions.

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He said: “They may have an obligation to just tell us what they want to do, and then we will see if it fulfills all its obligations.”

However, the planned law has not yet taken effect. The European Commission will have to negotiate with EU countries and the European Parliament to agree on final legislation, a process that may take a year or two.

© Thomson Reuters 2020

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