The European Commission has designated six big tech companies as gatekeepers to the digital economy, subjecting them to stricter regulations.
it’s part of the step digital market act (DMA), a pioneering piece of legislation that adapts long-standing principles of competition policy to the new reality of the 21st century, where a few corporations have accumulated enormous influence over the free market, often to the detriment of small businesses and everyday users is harmed.
Advertisement
Five US companies – Alphabet, Amazon, Apple, Meta and Microsoft – and one Chinese – ByteDance – are initially classified as gatekeepers. Now they face legal obligations to change the way they present their popular services online, such as messaging, social media, video-sharing and internet browsers.
Companies are considered gatekeepers because they meet certain quantitative criteria: an annual turnover of at least €7.5 billion in the European market or a market capitalization of at least €75 billion, and more than 45 million monthly users and 10,000 annual businesses the user. European Union Area.
The European Commission says this economic power has given them a “strong and durable” position of dominance in the digital economy, and a new set of stringent rules is needed to rein in the excess of their power, freeing up citizens Can ensure options, reduce barriers. Be competitive and create more accountability.
“This is a very important milestone for online freedom and innovation in Europe,” Thierry Breton, the European commissioner for the internal market, promised stronger enforcement. “No online platform can afford to behave as if it’s too big to care.”
Gatekeepers will be prohibited from ranking their own products or services more favorably, a long-standing point of contention between Big Tech and SMEs.
They must also allow users to easily remove apps pre-installed on devices and install third-party apps that provide an equivalent service.
Similarly, before tailoring targeted ads, platforms must ask users for their explicit permission before combining personal data obtained from different services such as Instagram and Facebook, both of which are powered by Meta.
The obligations will go into full effect in six months, during which time gatekeepers must inform the European Commission how they intend to comply with the law.
In case of non-compliance, the executive can impose a penalty of up to 10% of the company’s worldwide turnover, which can double if the wrongdoing continues. Brussels can also apply remedial measures, such as forcing a corporation to sell part of its business.
From google maps to tiktok
As a starting point, the services subject to the rules will be:
- Alphabet: Android, Google Search, Chrome, Google Maps, Google Play, Google Shopping, Google Ads and YouTube.
- Amazon: Amazon Marketplace, Amazon Advertising.
- Apple: App Store, Safari, iOS.
- bytedance: TIC Toc.
- meta: Facebook, Instagram, WhatsApp, Messenger, Meta Marketplace, Meta Ads.
- Microsoft: LinkedIn, Windows PC OS.
The list is open and companies may be added or removed over time.
Advertisement
The European Commission is considering whether four additional services – Microsoft’s Bing, Edge and advertising, and Apple’s iMessage – should qualify as “core platform services” and therefore be made liable to new rules should go.
Notably, two well-known, widely used email providers – Alphabet’s Gmail and Microsoft’s Outlook – were dropped from the initial selection after the parent companies successfully argued against the designation.
South Korean tech giant Samsung was similarly left out, despite the company already informed Commission of your ability to be a gatekeeper.
X, formerly known as Twitter, was also spared.
Adopted in September 2022, the DMA adds a new chapter to EU competition policy. With the law, Brussels changes its traditional philosophy: instead of focusing on lengthy legal cases against malpractice that have been going on for years, the DMA introduced east east Rules for preventing offenses from being committed in their inception.
Advertisement
Unlike the General Data Protection Regulation (GDPR), whose enforcement depends on national authorities and often leads to varying results, the implementation of the DMA will be centralized in a specialized unit within the European Commission which will be staffed by 80 staff members, including legal, by 2024. will collect Specialist, Data Scientist and Policy Officer.
Given its unprecedented nature, the legislation is expected to resonate beyond the bloc’s borders and have an impact in other countries that share similar concerns about the excessive, uncontrolled market power wielded by Big Tech.
This article has been updated with more information about DMA.
