Tech giants like Facebook (FB) - Get Meta Platforms Inc. Class A Report, Amazon (AMZN) - Get Amazon.com, Inc. Report and Google (GOOGL) - Get Alphabet Inc. Class A Report face fines of up to 6% of their revenue if they do not purge illegal content published on their platforms, according to draft regulations the European Union has proposed.
The EU plans to target platforms that have a "disproportionate influence" on users on the Internet, the Financial Times reported.
The new EU regulations are expected to be announced on Dec. 15, media reports say.
To be sure, the new rules being formulated under the Digital Services Act would still need approval by member states and European lawmakers.
If Facebook were fined the maximum 6% under the new rules, the social network would face a $4.2 billion payment, based on 2019 revenue, Bloomberg reported.
The rules also called for greater ad transparency and full disclosure to users related to the targeted advertising they see.
The EU is also set to unveil a proposed gatekeeper regulation, under which large platforms with more than 45 million users could face fines or breakups in Europe if they misuse competitor data or engage in other anticompetitive behavior, Bloomberg reported.
Large online platforms are “where the biggest audiences are reached — and, potentially, the most severe harms are caused. Such very large online platforms should therefore bear the highest standard of due diligence obligations, proportionate to their societal impact and means," said the draft regulation document seen by the FT.
On Thursday, the Federal Trade Commission and most states filed an antitrust lawsuit against Facebook, charging that the social-media company engaged in anticompetitive behavior to maintain a monopoly position in personal social networking.
The commission said it sought to unwind Facebook's acquisitions of Instagram and Whatsapp and bar Facebook from engaging in anticompetitive practices that have helped it dominate the personal social networking market.