By Sam Schechner 

U.S. tech firms are gearing up to fight a European Union plan to level the playing field for companies competing against Internet giants, arguing that the plan could push the bloc toward protectionism and censorship.

The EU's executive arm announced a swath of proposals on Wednesday aimed at boosting investment in European startups, as well as at harmonizing copyright rules and simplifying regulation for companies that sell goods or send data across European borders.

But the plan for a new European digital strategy also strikes at a pressure point for U.S. technology firms in Europe by proposing the EU study a new regulatory framework for big Internet companies such as Google Inc. and Facebook Inc. Under the blueprint, the EU is also opening an investigation into whether Internet commerce companies like Amazon.com Inc. are restricting cross-border trade.

While far from becoming law, the new proposals show how the legal landscape is already shifting in response to European fears that big U.S. tech firms have become too dominant. That's leading the firms to push back publicly and privately in an effort to defend one of their biggest markets.

"Imposing regulator barriers would be a grave mistake for Europe, and would have harmful effects on trans-Atlantic trade and investment," said Dean Garfield, head of the Information Technology Industry Council, a Washington, D.C.-based trade group that includes Google, Facebook and Microsoft Corp.

One U.S. technology executive added: "This is a regulatory agenda in search of a rationale."

The set of proposals is the latest salvo in Europe's push to rein in the power of a cadre of U.S.-based Internet superpowers. National regulators in the Netherlands, Spain and other countries are investigating Facebook's privacy practices. At the EU level, the antitrust regulator has filed formal charges against Google alleging that it has abused its dominance as a search engine to promote its own businesses.

France and Germany have been at the forefront in the push for regulation of so-called Internet platforms for the better part of two years. In France, government advisory bodies have sketched out new principles they describe as "platform neutrality" aimed at creating new obligations for big tech companies. Senior officials from both countries addressed a letter last week to Brussels officials to urge action.

In an internal position paper in February, the office of EU Digital Commissioner Günther Oettinger said that the bloc should as part of its deliberation consider creating an EU-wide regulator. But the proposal on Wednesday is only to launch a public consultation.

"Exploring these issues could be a good exercise," said Mario Mariniello, a research fellow who studies regulation and competition policy at Bruegel, a Brussels-based think tank. "But the danger is that it will descend into protectionism."

To be sure, technology companies say that they support many elements of the digital-single-market plan, such as harmonizing copyright rules, which would simplify their businesses. But they say that other elements of the plan, beyond platform regulation, could create new regulatory headaches, such as audiovisual rules to cover online-video services, they say.

"Some of these proposals take on real problems, but others also take on perceived problems where there is very little evidence base," said James Waterworth, head of the European office for the Computer & Communications Industry Association, a U.S.-based trade group.

In response, executives at the companies say that they plan a flurry of lobbying to explain their businesses to European officials, and to remind the general public how they contribute to the European economy. "This will kick off an intensive period of everybody lobbying the Commission madly," a U.S. tech executive said.

Amazon, for instance, says its European-based sellers earned more than EUR2.8 billion ($3.12 billion) in cross-border sales within Europe last year. Apple has highlighted its hiring and spending in Europe. In France, Google recently launched an advertising campaign dubbed "Engine of French Success" to highlight how the search engine helps French businesses.

"We have to make a better case," another U.S. tech executive said.

The proposal to better fight "illegal content on the Internet" is one of the most controversial. Under the EU's current rules, tech companies comply with valid take-down requests from governments and copyright holders, but they generally aren't liable for content to which they have not been alerted.

But in changes being considered as part of Wednesday's proposals, the EU could require "Internet intermediary services" to monitor their systems for illicit content--something tech executives say could have a chilling effect on free speech.

"You could just end up censoring everything because that's the easier thing to do," said Chris Sherwood, the head of public policy for Allegro Group, an online marketplace based in Europe.

Officials in France, the U.K. and Germany have in recent months repeatedly demanded faster and more effective removal of terrorist propaganda from online platforms. But while the companies say they are willing to cooperate, they have resisted calls for automated or pre-emptive filtering.

Instead they have sought ways to speed up the existing system, striking a deal last month with French officials.

Write to Sam Schechner at sam.schechner@wsj.com

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