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European regulators have agreed on a Digital Markets Act that would impose a host of new requirements on big tech companies classified as “gatekeepers”. The final votes on the law are still pending.
“The text provisionally agreed by Parliament and Council negotiators targets large companies offering so-called ‘core platform services’ that are most vulnerable to unfair commercial practices, such as social networks or search engines, with a market capitalization of at least €75 billion or one Annual turnover of 7.5 billion,” the European Parliament said in a statement yesterday. “In order to be called ‘gatekeepers’, these companies must also offer certain services such as browsers, messengers or social media that serve at least 45 million monthly end users in the EU and have 10,000 business users per year.”
Google, Apple, Amazon, Facebook owner Meta and Microsoft would apparently have to adhere to the new rules. “The Digital Market Act puts an end to the increasing dominance of Big Tech companies. From now on they have to show that they also allow fair competition on the Internet,” said Andreas Schwab, Member of the European Parliament from Germany and rapporteur for the European Parliament’s Internal Market and Consumer Protection Committee.
EU lawmakers agreed that big messaging services like Whatsapp, Facebook Messenger and Apple’s iMessage “need to open up and work with smaller messaging platforms if they choose to.” Users of small or large platforms could then exchange messages, send files or make video calls via messaging apps, giving them more choice,” said the European Parliament’s announcement. The wording makes it unclear whether the largest messaging apps work with each other or only have to work with smaller competitors.
Lawmakers agreed that specific interoperability requirements for social networks “will be evaluated in the future.” Another provision states that “the combination of personal data for targeted advertising is only permitted with the express consent of the gatekeeper”.
“If a gatekeeper doesn’t play by the rules, they will [European] The Commission can impose fines of up to 10 percent of its total worldwide sales in the previous financial year, and up to 20 percent for repeated violations. In the case of systematic violations, the Commission can ban them from acquiring other companies for a certain period of time
App Store Alternatives
The Hollywood Reporter detailed some of the practical implications of the new rules. “Apple, for example, must allow alternatives to its App Store for downloading apps and allow payment methods for the App Store other than Apple’s own,” the article reads. It went on:
Google and Meta, the parent company of Facebook and Instagram, will no longer be able to offer targeted advertising across multiple platforms – using data collected when users switch between services from the same company, such as YouTube and Google Search. switch without explicitly obtaining consent.
Amazon will be banned from using data collected from outside sellers through its services to offer competing products, a practice already the subject of a separate EU antitrust investigation.
The text of the law has yet to be finalized [the] technical level and checked by legal-linguistic experts” and then approved by the European Parliament and Council, the Parliament’s announcement said. The Digital Markets Act would then “come into force 20 days after its publication in the EU Official Journal and the rules apply six months thereafter.”