Europe has almost finished rewriting its digital rulebook. Now comes the hard part: who gets to enforce it?

On Thursday, European Union countries approved the Digital Services Act and Digital Markets Act — landmark proposals aimed at rebalancing the online world in favor of consumers, while also holding Big Tech firms more accountable for what is posted online and how they compete against smaller rivals.

Yet even as EU leaders hope to finalize these rules with their counterparts at the European Commission and European Parliament during the first half of next year, a bare-knuckled brawl is already under way.

The issue: which regulators will have the right to levy hefty fines — between 6 and 10 percent of a company’s annual revenue, or potentially billions of euros — for potential wrongdoing.

On one side, there are those who want the Commission to take a greater role in policing the likes of Facebook, Google and Amazon after efforts to enforce the bloc’s privacy standards, the General Data Protection Regulation (GDPR), have descended into bickering between national regulators over who is in charge.

On the other, there are those who want countries to retain crucial enforcement powers. This camp includes national agencies, particularly competition authorities, which have spent years building up their enforcement muscles.

A lot is on the line.

Brussels has bet its reputation as the West’s digital police officer on these new proposals, hoping to nudge its own member countries and allies like the United States and United Kingdom to follow its lead in clamping down on potential excesses, primarily from some of Silicon Valley’s biggest names.

But the upcoming rules will only be as good as how they are enforced, and policymakers are divided over the role the Commission should play compared to national authorities.

These differences must now be hammered out over the next six months before Europe’s digital rulebook — encompassing both antitrust and social media laws — is finally signed off and becomes law across the 27-country bloc, most likely by 2023.

„It’s a revolution for Big Tech. But it’s a revolution for Europe as well, in terms of a leap forward in terms of integration,“ said Alexandre de Streel, head of an outside expert group helping the Commission with its proposals linked to the online platform economy.

„The enforcement will be hugely complicated,“ he added. „I think the Commission has underestimated the task.“

A tale of two proposals

The battleground over how much control the Commission will have over Europe’s revamped digital playbook differs between the Digital Services Act (DSA) and Digital Markets Act (DMA).

Under the original proposals for the DSA, which regulates moderation policies for illegal content on social media and dangerous on e-commerce sites, Brussels was expected to play second fiddle to national regulators.

In keeping with legal tradition in the bloc, national watchdogs would have been the go-to enforcement agencies unless issues span multiple countries, requiring EU officials to step in.

But over the last year of negotiations, that has changed. Plans approved by national governments will make the Commission sole regulator for the largest tech companies like Facebook and Google, entrusting Brussels with the power to levy multi-billion euro fines if these companies do not sufficiently clamp down on illegal content across their platforms. National regulators will still police smaller platforms.

This 180-degree U-turn stems from experiences within Europe’s privacy rules, which required one agency — primarily the Irish or Luxembourg data protection authority — to be the only regulator in charge of U.S. tech giants because these firms headquartered themselves in these low-tax countries.

Five Commission officials told POLITICO that limitations with that system, including a lack of resources for national privacy regulators to enforce the rules and squabbling between different countries‘ agencies over who should lead investigations, had spurred policymakers to turn to Brussels, not national capitals, to enforce the Digital Services Act. The officials spoke on the condition of anonymity because they were not authorized to speak publicly about internal deliberations.

Yet Brussels‘ expected new enforcement role does not come without its challenges.

Few, if any, agencies have yet been tasked with such a fundamental enforcement role over social media and e-commerce. Those powers include overseeing companies‘ risk assessments of potentially harmful activity on their networks, ensuring outside groups can access internal data from these firms, and investigating — with the potential for blockbuster fines — potential wrongdoing.

That task is likely to fall to the Commission’s Directorate-General for Communications Networks, Content and Technology, or DG Connect, which does not have an enforcement track record and will likely have to hire hundreds of new regulators to keep pace with the new rules. The proposal initially planned for 50 Commission employees to work on the supervision of the Digital Services Act.

Three separate EU officials told POLITICO that while some in this Commission unit were eager to take on the role, a lack of expertise and resources could potentially hamstring its efforts. One of those officials suggested that different parts of the EU executive branch would have to help with the Herculean task of policing the likes of Facebook, while another questioned if EU policymakers had thought through the practicalities of relying on an untested Commission regulator to keep people safe online.

„We don’t have 40 billion in the bank and public institutions are permanently squeezed for resources,“ said one official, who spoke on the condition of anonymity to discuss internal matters. „We don’t have the same technical know-how as Google has.“

Brussels vs. national capitals

When it comes to the Digital Markets Act, the question isn’t whether Brussels will have enough power. It’s about giving it too much.

Under proposals approved by EU ministers Thursday, the Commission’s antitrust unit, or the Directorate-General for Competition, will retain powers to enforce the new rules, including limits on how tech companies can expand if such activities could harm rivals or consumers. National regulators must also inform Brussels whenever they undertake investigations, though there is scope for some coordination between EU and national regulators.

This policy shift, outlined in the Digital Markets Act, toward acting before, not after, potential wrongdoing represents a profound shift in competition enforcement.

Yet Brussels is not the only game in town.

National competition regulators, particularly in Germany and France, have made clear that they want to retain power over digital antitrust cases, with Berlin passing new rules in early 2021 that gave the country’s Federal Cartel Office similar powers to stop firms from moving into new markets. So far, Andreas Mundt, that agency’s chief, has used those powers to start investigations into the likes of Facebook, Amazon and Apple.

Speaking to the German Bar Association in October, Mundt voiced concerns that if the Commission was given sole enforcement power over the Digital Markets Act, there might not be enough resources to investigate all the potential online abuses.

„It would make more sense to go back to the national competition agencies and include them in the enforcement of the DMA,“ he said.

Germany, France and the Netherlands sent a collective open letter to the Commission in September that called for the sharing of enforcement powers between Brussels and national capitals. These countries urged EU officials to give space to local regulators to pursue their own cases, even if they went further than what had been laid down in the EU-wide rules. That relationship between Commission enforcers and national regulators still needs to be hammered out.

„Since the digital economy is complex and multifaceted, a number of constellations may bear national peculiarities,“ the French, German and Dutch governments said in their open letter. „Member states should therefore remain able to set and enforce national rules.“

Still, the Commission is readying itself for the tough task of enforcement.

On November 16, the EU executive’s competition department official created its so-called Digital Markets Act task force, which could eventually play an instrumental role in enforcing the new rules by determining which dominant companies are so-called „gatekeepers.“ For now, Brussels has its sights set on ensuring the antitrust proposals are approved early in the new year.

„The objective of the new DMA task force will first be to ensure a timely adoption of the rules,“ said a Commission official who spoke on the condition of anonymity to discuss internal procedures. „After that, the next stage is for us to decide who exactly will be considered a gatekeeper.“

CORRECTION: This article was updated to correctly spell Alexandre de Streel’s name.

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