New rules designed to rein in the dominance of big tech companies are coming into force in the EU
Under the Digital Markets Act (DMA), technology giants such as Google and Apple could be made to open up their services and platforms to other firms and developers.
Messaging apps, for example, could be required to work with smaller rival applications.
The legislation will not apply in the UK because of Brexit.
In the European Union, the act will change the rules for companies of large size and influence – the so-called gatekeeper firms.
But some of the larger firms have expressed concern about the DMA’s potential impact on security and innovation.
Under the DMA, smaller messaging apps will be able to ask tech gatekeepers to allow their users to send and receive messages via the bigger firm’s platform.
However, large firms will not be required to make more advanced features interoperable immediately. Under the plans, audio and video calls between two individual users or groups of end users on different platforms will not happen for four years.
The larger firms may also be required to allow their users to choose different app stores.
Gerard de Graaf, an EU official, cited the example of an iPhone user, who should “now be able to download apps not just from the App Store but from other app stores or from the internet.”
The European Commission has also released a video explaining the purpose of the act.
The BEUC – representing many European consumer organizations – called the act “a landmark law for the EU’s digital transformation.”
“This legislation will rebalance digital markets, increase consumer choice and put an end to many of the worst practices that big tech has engaged in over the years,” it said.
It gave two examples of changes under the DMA:
- Google could be required to not to promote its own local, travel or job services over those of rivals in search results
- Apple might be unable to force users to use its payment service for app purchases
But it said it was crucial member states gave the commission the resources it would need to enforce the new act.
The DMA now moves into a six-month implementation phase and will start to apply on 2 May 2023.
Margrethe Vestager, the commissioner for competition, who originally proposed the legislation said: “We invite all potential gatekeepers, their competitors or consumer organizations, to come and talk to us about how to implement the DMA best.”
The act does not name specific gatekeepers, with the commission aiming to decide which companies will fall under its remit at the latest by 6 September 2023.
But it says gatekeepers will be companies that meet criteria in terms of financial size and numbers of users and have an “entrenched and durable” position in the market.
Companies that do not comply with the DMA could face fines of up to 10% of their annual worldwide turnover for the first infringement and up to 20% for repeated rule-breaking.
The DMA imposes a number of obligations on firms identified as gatekeepers, including:
- Letting users install third-party apps or app stores
- Stopping firms from ranking their own products or services more favorably than their competitors
- Preventing firms from forcing app developers to use the gatekeeper’s services (such as payment systems) in order to appear in the gatekeeper’s app stores
- Stopping firms from tracking what users do away from their platform for targeted advertising without obtaining the user’s permission
Apple has previously said it was “concerned that some provisions of the DMA will create unnecessary privacy and security vulnerabilities for our users”.
Google has said: “While we support many of the DMA’s ambitions around consumer choice and interoperability, we’re worried that some of these rules could reduce innovation and the choice available to Europeans.”
While the rules will only apply in the EU, a committee of UK MPs recently urged the government to publish the draft Competition, Consumer and Digital Markets Bill, which aims to provide regulators with new tools to tackle anti-competitive behavior by big tech firms.