A fight over hate speech and fake news on Facebook, YouTube and Twitter has put the European Commission on a collision course with Germany.

The role of fake news in U.S. and European elections and the proliferation of hate speech online has put policing web content at the top of German Justice Minister Heiko Maas’ agenda. A draft law under debate in the Bundestag threatens social media giants with fines of up to €50 million for failing to take down illegal hate speech and some kinds of fake news fast enough.

If the Commission responds to industry demands and bashes the German proposal, it will be picking an unpopular fight against the EU’s most powerful country in the middle of an election campaign.

The EU’s longstanding approach to tackling sensitive online content has been hands-off: As long as internet companies aren’t actively monitoring what goes on their sites, the Commission won’t hold them legally responsible for it. As concerns about online hate speech, fake news and terrorist propaganda grow, the Commission has vowed to avoid legal crackdowns as long as tech firms do their part in removing the content, without hurting free speech.

If the Commission does nothing and Germany’s proposal takes effect, its broad tech vision for Europe could be eroded. The EU wants similar digital rules across the bloc and to avoid fragmentation at all costs. That principle underpins the digital single market strategy, unveiled two years ago.

“The idea of the [digital single market] is for it to be exactly that: A single market for digital in Europe. Not a patchy fragmented digital space that is home to major national differences,” Digital Vice President Andrus Ansip said earlier this year.

And going after Germany would reinforce the Commission’s own strategy, designed for rapid growth of the digital economy: When the Commission unveiled Thursday an evaluation of how tech companies are doing in tackling online hate speech, it found companies are removing more online hate speech than in the past, even without the threat of legislation.

“This is an important step in the right direction and shows that a self-regulatory approach can work, if all actors do their part,” Commissioner for Justice and Consumers Věra Jourová said.

EU officials have until June 28 to respond to the German legislation, according to EU notification rules.

Setting a precedent

The German draft law calls into question the fundamental right of freedom of speech, prompting the Commission to insist privately that Berlin’s effort must be reined in.

“It’s important to keep pressure on them,” a high-level Commission official said.

But the official acknowledged the political landmines involved as Germans prepare to head to polls in September. EU interference in national politics could push Euroskeptic voters towards more populist candidates. “We don’t want to mingle in an election campaign,” the official said. “I doubt we will comment on it.”

At the same time, the Commission faces fierce lobbying from the tech sector, worried that the German legislation will disrupt the industry. “It is essential that the European Commission takes action on the matter as promptly as possible to avoid … the total disregard of EU law,” said Siada El-Ramly, the head of EDiMA, a trade group representing major internet companies including Facebook, Google and Twitter.

Tech companies set out a clear legal argument, backed up by academics and digital experts. The German law could violate one of the pillars of internet freedom: the 2000 e-Commerce Directive. The law explicitly says internet companies should not be held liable for what shows up on their sites, like hateful posts and terrorist content, as long as they act solely as passive intermediaries. If they are seen to be active monitors, they could be subject to further legal responsibilities.

Tech companies fear they will have to start doing just that, opening them to major legal risks. “The draft [German] law provides an incentive to delete content that is not clearly illegal when social networks face such a disproportionate threat of fines,” a Facebook spokesperson said. “It would have the effect of transferring responsibility for complex legal decisions from public authorities to private companies.”

Doing nothing also would set a precedent for other European countries and could lead to more digital fragmentation. “Failure to react would show the Commission has problems enforcing EU law,” said James Waterworth, the Computer & Communications Industry Association’s vice president for Europe.

U.K. Prime Minister Theresa May’s Conservative Party released a manifesto earlier this month potentially threatening fines against tech firms failing to flag and remove content that is harmful to minors or “direct users unintentionally to hate speech, pornography or other sources of harm.”

France’s new president, Emmanuel Macron, also vowed to fight fake news and “regulate the internet because today certain players are activists and have a very important role in the campaign.”

Carrots trump sticks

Commission officials say they are unlikely to formally object to the German proposal before the June deadline.

And within Germany, support for the proposal is not unanimous. German Chancellor Angela Merkel’s Christian Democratic Union pointed out that the draft law shows too little coherence with the EU’s self-regulatory approach earlier this month.

The Commission is doubling down on its approach at the same time. By the end of the year, the Commission is expected to release guidance for internet platforms on how they should flag and remove illegal content. It may also introduce a “Good Samaritans” principle, offering additional protection to internet companies that actively monitor their sites for sensitive material.

Tech companies and policymakers hoping to regulate them are pleased. 

“It seems to be the field where the online platforms are willing to take more responsibility, but they need advice how to do it without contradicting with the freedom of speech,” said Henna Virkkunen, a Finnish European People’s Party MEP who also wrote a parliamentary report on how to regulate internet companies.

The Commission’s stance is clear: It’s better to regulate the internet with carrots than with sticks.

Tech companies, including Google, want it to stay that way. “The Commission’s self-regulatory approach is pragmatic and focused on action,” said a YouTube spokesperson.

Keeping quiet on Germany now does not preclude later action. Another Commission official indicated that the country wouldn’t get special treatment if it were found to violate EU rules.

Once the law is passed — and the election is over — a formal infringement procedure would become a distinct possibility.

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