Here’s how Google and Apple embraced the Digital Markets Act
Apple and Google attack the Digital Markets Act (Dma), the bill to combat unfair practices and abuse of dominant position of Big Tech on digital markets
Apple and Google attack the EU Digital Markets Act.
On March 25, the European Union reached a political agreement on the Digital Markets Act (Dma), the bill to combat unfair practices and abuse of dominant position of Big Tech on digital markets. This was announced on Twitter by the current French presidency of the EU. It is "an innovative and long-awaited text to ensure fair competition in digital markets", reads the tweet.
But Google and Apple have already retorted, suggesting that the legislation will reduce innovation and efficiency.
If the new Digital Markets Act is violated – once it goes into effect in October – big tech companies like Meta and Amazon face fines at 20% of global revenue. Not only that, big techs will even risk being dismantled.
As the FT points out, the DMA deal came just hours before the US and EU announced an interim agreement on privacy requirements for tech companies sending data across borders.
Now the DMA will have to be formally approved by both Parliament and the Council.
All the details.
THE SCOPE OF DMA
The regulation will cover all companies with a market capitalization of at least € 75 billion or an annual turnover of € 7.5 billion, and that operate browser, messaging or social media services with at least 45 million monthly end users in the EU.
Therefore, it is the handful of US big techs that risk the most: Google, Amazon, Meta (Facebook), Apple.
THE CONSEQUENCES FOR BIG TECH
If a gatekeeper violates the rules laid down by the legislation, he risks a fine of up to 10% of his total worldwide turnover. In the event of a repeat offense, you risk a fine of up to 20% of the global turnover.
Under the new rules, if a gatekeeper violates the rules at least three times in eight years, the European Commission can open a market investigation. So as to impose behavioral or structural remedies. To ensure that gatekeepers do not undermine the rules set out in the DMA, the regulation also applies anti-circumvention provisions.
As Fortune summarizes, "the law will force companies to allow users to install apps from third-party platforms." It will prohibit the combination of personal data from different sources, grouping services and self-preference practices. DMA will force so-called gatekeepers to open their platforms to competition, for example by forcing companies to ensure that their services are "interoperable".
WHO IS IT FOR?
It is expected to reshape the way companies like Apple, Meta, Google, Amazon and Microsoft manage their app stores, advertising, e-commerce and messaging services. This means, for example, that users of Facebook's WhatsApp service will be able to send messages directly to communication apps created by smaller competitors. It will force Apple to open its App Store to third-party payment options instead of forcing users to use Apple's payment system.
The European Commission will be the sole enforcer of the regulation.
GOOGLE'S FEARS ABOUT DIGITAL MARKETS ACT
But the big tech protests were not long in coming.
Google promptly stated: "We are concerned that some of these rules may reduce the innovation and choice available to Europeans." A spokesperson for the Mountain View giant added that the company will now study the text to understand what is needed to comply.
THE LOCATION OF APPLE
The reaction of the giant from Cupertino was also immediate.
Apple said the new law "will create unnecessary privacy and security vulnerabilities for our users, while others will ban us from charging for the intellectual property we invest heavily in."
SATISFACTION IN BRUSSELS
The European Commission has thus ushered in the new era of rules for Big Tech.
The new law "shows a willingness for democracy to say 'we will hold them in check," commented Margrethe Vestager, EU executive vice president in charge of digital policy. "In recent years the complaints have reached our door and we have seen what can happen on the market" and "we will make sure that it is open and competitive", warned Vestager, rattling off the numbers of cases opened with the Big. “In recent years as the competition commissioner, complaints have come to our doors. We didn't have one, not two, but three Google cases. We are now on the fourth. We already had two Amazon cases; now we have two Amazon cases open again. We have three Apple cases; we have a case on Facebook. We have seen what can happen in a market and we see the changes in the specifications anyway ”.
Thierry Breton, the French Commissioner responsible for the internal market, added: “It used to be the wild west. This is no longer the case. We are regaining control ”.
Finally, the definitive go-ahead is awaited in the coming weeks for the twin package DSA (Digital Services Act) on content moderation.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/ecco-come-google-e-apple-hanno-accolto-il-digital-markets-act/ on Sun, 03 Apr 2022 14:41:26 +0000.