EU ADOPTS DIGITAL GATEKEEPER RULES: The European Union's landmark bill to regulate tech is a done deal, our colleagues in Brussels reported late on Thursday. (Full release here; POLITICO's take here ). The new rules, which won't take effect until 2023, apply to large "gatekeeper" tech companies that EU officials claim exert too much control over the digital ecosystem. They include prohibitions on combining personal data from different sources, a ban on bundling digital services together and restrictions on companies giving preference to their own products. A jubilant Margarethe Vestager, the EU competition chief, took to Twitter, saying the bloc had "achieved something that is unprecedented: legislation that paves the way for open, fair, contestable digital markets." — Ink dried: The final version imposes new obligations on "core platform services" (read: social networks, search engines, web browsers and virtual assistants) with a market capitalization of about $82.5 billion or total annual revenue in Europe of at least $8.25 billion. U.S. tech giants Google, Apple, Amazon, Microsoft and Facebook parent Meta, as well as Chinese e-commerce giant Alibaba and the travel platform Booking, will all be subject to the rules. Messaging services must also meet interoperability requirements, meaning apps such as WhatsApp, Facebook Messenger or iMessage will have to open themselves up to smaller messaging platforms. And if they don't comply? Regulators can impose hefty fines of up to 10 percent of a company's global annual revenue, or 20 percent for repeat offenders. — Reaction across the pond: The White House didn't respond to a request for comment, though President Joe Biden is set to appear alongside European Commission President Ursula von der Leyen before reporters today in Brussels. (The topic is Ukraine, not digital legislation, but the new rules could conceivably come up.) Tech trade groups were (unsurprisingly) upset. "More fines and discriminatory rules targeting American companies will require more time and more money that would be better used keeping our data and critical infrastructure safe here at home," said Carl Holshouser, senior vice president of TechNet, a lobbying group that includes Amazon, Apple, Google and Meta as members. SANDERS PLAYS HARDBALL ON CHIPS FUNDING: The vast majority of lawmakers in Congress are eager to push the $52 billion in microchip subsidies off Capitol Hill and to the president's desk as soon as possible. But Sanders is forcing them to stop and take another vote or two on the measure. "Do we need to increase computer chip production in the United States? Yes, we do," the Vermont independent said on the Senate floor Thursday. "But we need to do it in a way that does not provide massive amounts of corporate welfare to an already enormously profitable industry." — Roadblock: The floor speech capped off a contentious day in the upper chamber, after Sanders signaled to Democratic leadership earlier that day that he'd block a vote to replace the House-passed competitiveness package (H.R. 4521) with its Senate counterpart (S. 1260 ) and kick it back to the House. That would start the process of taking the two bills — which each include tens of billions in chip industry subsidies — to a conference committee, where lawmakers will try to hammer out a compromise. Sen. Maria Cantwell (D-Wash.), the chair of the Senate Commerce Committee and an architect of the Senate's competitiveness package, railed against "those who want to delay" the bill in her own floor speech on Thursday. "There are some here who think we can dilly-dally along, and maybe take months and months and months to reconcile these two bills," Cantwell said. "They are wrong." Referencing the big subsidy packages for chipmakers now percolating in other parts of the world, she added, "I guarantee you the Europeans are not waiting." — Pound of flesh: Sanders eventually relented, but only after Senate Majority Leader Chuck Schumer made a verbal commitment on the Senate floor that the body would vote on whether to instruct lawmakers to insert two provisions into the competitiveness package once a conference begins. One would provide the government with an equity stake in any chip facilities built with taxpayer funds, and another would strip $10 billion from the Senate bill authorized for NASA's lunar landing program (something widely seen as favoring Blue Origin, Amazon founder Jeff Bezos' space company). Sanders first tried to get votes on both those amendments last June, when the Senate first passed its competitiveness bill, but was blocked at the time by leadership. "If private companies are going to benefit from the $53 billion in taxpayer subsidies, the financial gains must be shared with the American people, not just wealthy shareholders," Sanders said Thursday. (The actual tally is $52 billion.) — Expectation-setting: Sanders' play is likely to fail, at least when it comes to chips — the industry is resistant to giving the government an equity stake in new facilities, and few lawmakers seem enthusiastic about the idea. But assuming Schumer keeps his word, the vote will be an interesting look into who else on Capitol Hill has second thoughts about all those subsidies. NEW DETAILS ON HOUSE GOP'S POST-MIDTERM TECH PLANS: House Republicans expect to be banging committee gavels by this time next year. And as they huddle in Ponte Vedra Beach, Fla. this week for their annual retreat, they're laying out in increasing granularity what their tech policy plans will look like. On Thursday, Rep. Cathy McMorris Rodgers (R-Wash.) — the ranking member of the House Energy and Commerce Committee tapped last year by House Minority Leader Kevin McCarthy to lead the House GOP's "Big Tech Censorship and Data Task Force" — provided Republicans at the retreat with new details about her priorities next year, according to her spokesperson. That includes a more explicit focus on tech antitrust, as well as new specifics on her plans for Section 230, the tech industry's treasured legal liability shield. — App stores in the crosshairs: With a couple exceptions , House Republicans — particularly those on the Energy and Commerce Committee — had so far shown little interest in reining in the control Google and Apple exert over their app stores. But on Thursday, McMorris Rodgers told lawmakers she plans to address that issue next year, and restrict what third-party developers argue is anticompetitive behavior. A McMorris Rodgers spokesperson would not say whether that means she'll support the Open App Markets Act ( H.R. 7030), a bipartisan bill whose Senate companion advanced out of the Senate Judiciary Committee last month. — More antitrust: One week after Rep. Ken Buck (R-Colo.) groused that the task force wasn't taking tech antitrust seriously, McMorris Rodgers laid out a bevy of new priorities for checking the tech giants. That included steps to preserve a market for smaller social media platforms (she name-dropped conservative Twitter alternatives GETTR, TRUTH, Rumble and Parler), as well as plans to strengthen the antitrust agencies and state attorney generals' ability to review and enforce possible antitrust violations. — 'Scrapping' Section 230: McMorris Rodgers told Republicans she's looking at "scrapping Section 230 for the biggest tech companies" while retaining it for smaller up-and-comers. She also zeroed in on parents' more specific concerns about how social media may endanger children through drug-related content and cyberbullying. That focus suggests Republicans, after casting a wide net last year , may be coalescing around more narrowly removing Section 230 protections for a few types of user posts that, in her words, "facilitate illegal activity." Congress has successfully altered Section 230 only once, when it passed a law in 2018 removing tech platforms' liability protections for content found to have facilitated sex trafficking.
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