U.S. tech giants face curbs on data sharing, digital marketplaces, under draft EU rules

Alphabet unit Google, Facebook , Amazon , Apple and other U.S. tech giants could be banned from favouring their services or forcing users to sign up to a bundle of services under draft EU rules aimed at reining in their power.

The draft rules, known as the Digital Services Act, aim to set the ground rules for data-sharing and how digital marketplaces operate. They are expected to come into force by the end of the year.

The European Commission is taking a tough line against U.S. tech giants, driven in part by antitrust cases resulting in decisions that subsequently failed to boost competition because of the lengthy process that typically takes several years.

The case has taken on urgency because of the dependence of thousands of EU companies on the tech giants for their business.

Gatekeepers, such as companies with bottleneck power or strategic market status, will not be allowed to use data collected on their platforms to target users unless this data is shared with rivals, according to the document seen by Reuters.

"Gatekeepers shall not pre-install exclusively their own applications nor require from any third party operating system developers or hardware manufacturers to pre-install exclusively gatekeepers' own application," the paper said.

Another clause would ban gatekeepers from blocking rivals offering their products to customers outside of the gatekeeper's platform or services, a move which would affect Apple and Google with their restrictive app store rules and payment.

The rules would also subject gatekeepers to annual audits of their advertising metrics and reporting practices.