By Foo Yun Chee

BRUSSELS, (Reuters) – The United States warned that the draft of landmark EU regulations requiring tech companies to exchange information with their rivals could pose a risk to intellectual property.

According to the paper, a requirement for gatekeepers (companies that have access to data and control their platforms) to modify their business practices or design their software could impact security and consumer protection.

This document was distributed to EU countries and the European Commission, as well as the companies involved, and highlights U.S. concern that these rules would be at the cost of U.S. businesses.

Margrethe Vestager (EU antitrust chief) was fed up with the slow speed of investigation and proposed two sets rules to regulate Amazon (NASDAQ?), Apple(NASDAQ:), Alphabet, Google (NASDAQ 🙂 and Facebook (NASDAQ :).

Digital Markets Act, (DMA), imposes a strict list of guidelines that targets each company’s core business model. This is reinforced with fines up to 10% of worldwide turnover.

Digital Services Act (DSA), which forces tech companies to be more aggressive in tackling illegal content, carries a 6% penalty for any noncompliance.

The document stated that DMA could require gatekeepers to give information to competitors in certain situations. This would be subject to intellectual property law.

“However the DMA lacks specific language to protect intellectual property and trade secrets”

There is concern, therefore, that DMA could override current protections for intellectual rights and trade secrets in EU law.

The U.S. government refused to comment.

According to a U.S. government official, “Broadly speaking the Biden Administration has been consulting stakeholders and reviewing both DMAs and DSA.”

The official stated that they had also made it clear that they oppose any efforts to only target U.S.-based companies.

This document warned that cloud service providers should not be subject to excessive requirements. They may act as neutral carriers of data between points. It suggested that fines and penalties for them could also be reconsidered by the EU.

According to the DSA paper, illegal content must be narrowly defined “to prevent it from being a source for conflicts of law or a benefit to member countries who have shown an inability to limit press freedoms and association rights”.

The guidelines should be clear about the geographical scope of an platform’s obligation for illegal content removal, according to the paper. There are also concerns that an EU country could issue a pan European order.