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EU Aims to Open Up Big Tech’s Walled Gardens with Digital Markets Act

Posted March 25, 2022 | Amazon | Antitrust | Apple | Cloud | European Union | Facebook | Google | Meta | Microsoft | Windows

Image credit: Håkan Dahlström

The European Union could soon force Apple, Google, Meta, and Microsoft to change their commercial practices in a pretty big way. Yesterday, EU Parliament and Council negotiators reached a consensus on the Digital Markets Act (DMA), a new set of rules aiming to limit the power of the biggest technology companies.

The new text, which could become applicable later this year, will target companies with a market capitalization superior to €75 billion or an annual revenue of at least €7.5 billion. These “gatekeepers” in the eyes of the EU must also offer services such as web browsers, messaging apps, or social media platforms at least 45 million monthly users in the US.

One of the major implications of the Digital Markets Act would be that the biggest messaging apps such as WhatsApp, Facebook Messenger, or iMessage would need to become interoperable with “smaller messaging platforms.” The EU’s press release echoes the words of Google Senior Vice President Hiroshi Lockheimer, who recently described Apple’s iMessage lock-in as “a documented strategy” to sell more iPhones.

The Digital Market Act will also include new rules related to data collection and default apps on various platforms. “Parliament also ensured that combining personal data for targeted advertising will only be allowed with explicit consent to the gatekeeper. They also managed to include a requirement to allow users to freely choose their browser, virtual assistants or search engines,” the press release reads.

The Mozilla Foundation, which has been a big supporter of making the Internet open and accessible to all praised EU lawmakers for their forward-thinking approach. “The EU Digital Markets Act (DMA) gives consumers and businesses more freedom to deploy and use a variety of non big-tech software that can shape our lives in pivotal ways. We commend EU lawmakers for their speed and ambition in adopting these rules but we can’t rest on our laurels – we must now ensure the rules are implemented and enforced robustly and effectively,” a Mozilla spokesperson said.

The Digital Markets Act still needs to be finalized and approved by both the EU Parliament and Council, and that process could be completed in late 2022. Gatekeepers who won’t comply with the rules will expose themselves to a fee that could go up to 10% of their total worldwide revenue in the preceding financial year, which is quite significant. “In case of systematic infringements, the Commission may ban them from acquiring other companies for a certain time,” the EU also said.

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