Report: EU to introduce amendments extending consumer protections to free services such as Gmail and Facebook

The European Commission (EC) plans to introduce amendments to four current consumer protection directives that would extend those protections to users of free services like Gmail and Facebook that use consumer data as a form of payment, according to a leaked draft of the proposal reported by Euractiv.com.

The proposal says that personal data has an increasing economic value and is not simply “free.” The amendments propose fines of up to 4 percent of a company’s yearly revenue for those that do not comply.

This is the latest move by the European Union (EU) to try to get internet companies such as Google and Facebook to comply with their rules. The article reports that EU consumer watchdogs have been clamoring for increased fines for companies that flout EU rules. Last month, Belgium threatened Facebook with fines for non-compliance with its privacy rules, the latest salvo in an ongoing battle with the social media giant to get it to comply.

Adding to Facebook’s regulatory headaches, the EU is also investigating its role in a scandal stemming from revelations that the social network enabled users’ data to be accessed via a third-party app and transferred to Cambridge Analytica without users’ knowledge.

It’s also just under two months before the European Union’s (EU) General Data Protection Regulation (GDPR) is set to go into effect — introducing a sweeping set of rules with a similarly high fine for non-compliance. EU member states are allowed to implement directives as they wish; the GDPR is a regulation that applies evenly across the EU.

EC President Jean-Claude Juncker announced the legal change during his annual state of the union speech last September, according to Euractiv.com.

From the article:

Users that have not paid for email and social media, cloud storage, or online subscription platforms, will be given the right to receive information about the services before they sign up. They will also be [able] to cancel their contracts within two weeks.

Current EU consumer rules date back to 2011 and apply only to services that are paid for with money.

But according to the Commission, there are now “similarities and the interchangeability of paid digital services and digital services provided in exchange for personal data.”

Services that collect personal data that is not “exclusively necessary for supplying the digital content or digital service” will be forced to comply with the law.

There are some exemptions in the proposal — including services that only collect metadata like IP addresses and those that must collect data to comply with the law.

The proposal also includes requirements governing how online marketplaces rank search results.