(CN) — The EU’s second-highest court on Thursday sided with tech giants in a fight over digital regulation, finding Austria overstepped its authority.
Google, Meta and TikTok succeeded in fighting off an attempt by Austrian regulators to crack down on illegal content online by imposing stricter regulations than what is required in Ireland — where all three companies are registered — at the European Court of Justice.
The rules “would ultimately amount to subjecting the service providers concerned to different legislation,” the Luxembourg-based court wrote in a ruling in French, undermining the free movement of goods and services in the European Union.
EU member states are responsible for the enforcement of digital information regulations on companies headquartered within their borders and privacy advocates accuse Irish regulators of taking a very soft approach when it comes to the tech firms registered there.
In 2021, Austria introduced a law ordering social media companies to put in place a system for the notification and verification of illegal content. The regulation also required them to publish regular reports on how they handle such notifications and face fines for breaking the law.
Companies operating in Austria, regardless of where they were headquartered, were subject to the rules, facing fines of up to 10 million euros ($10.6 million) for failing to comply.
The trio first applied for an exemption from the Austrian Communications Regulatory Authority and, when that failed, appealed to the Federal Administrative Court, which also rejected the request.
The companies appealed that decision to the Supreme Administrative Court of Austria, which asked the EU’s top court to weigh in.
The group argued the EU's system of open borders and free trade among its 27 member states should protect Big Tech companies from the additional burdens sought by Austrian regulators.
The five-judge panel agreed. The legislation would “undermine mutual trust between member states and would be in contradiction with the principle of mutual recognition,” the judges said.
Earlier this year, an adviser to the court wrote in a non-binding opinion that, if allowed to move forward, the Austrian rules would create legal uncertainty for companies operating in the bloc. EU law “sought to eliminate legal obstacles to the proper functioning of the internal market,” advocate general Maciej Szpunar said.
Tech companies have fought various attempts by EU countries to broaden their data privacy powers. Last year, the same court found that Germany’s consumer protection association can sue the social media giant Meta for privacy breaches.Follow @mollyquell
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