The European Council gave its final approval on July 18 to new rules for a fair and competitive digital sector through the Digital Markets Act (DMA). The DMA defines new rules for large online platforms also called Big Tech such as Google, Apple and Amazon. If a large online platform is identified as Big Tech, it will have to comply with the DMA rules within six months.
Recall that the EU legal framework for digital services had not changed since the adoption of the e-commerce directive in 2000. Meanwhile, digital technologies, business models and services have evolved at a rapid pace. unprecedented. To keep pace, the European Commission presented a digital services package comprising the Digital Services Act (DSA) and the Digital Markets Act (DMA) in December 2020.
The digital services package is the EU’s response to the need to regulate the digital space. Together, the DSA and the DMA define a framework adapted to the economic and democratic footprint of digital gloves and introduce measures aimed at protecting users while supporting innovation in the digital economy.
Earlier this year, the European Union unveiled the biggest legislative initiative ever undertaken to balance out competition in the world of technology. The DMA will blacklist certain practices used by major platforms acting as “gatekeepers” and allow the Commission to conduct market investigations and sanction non-compliant behavior, the EU says.
The DMA guarantees a level playing field in the digital sector, establishing clear rights and rules for the big online platforms (the “gatekeepers”) and ensuring that none of them abuses their position. . Digital market regulation at EU level will create a fair and competitive digital environment, allowing businesses and consumers to take advantage of digital opportunities.
The new Digital Markets Act aims to limit the power of the biggest tech companies and allow smaller entities to compete with the, mostly American, companies. So far, the European Union has tackled antitrust issues on a case-by-case basis, but the Digital Markets Act aims to introduce sweeping reforms that will address systemic issues across the market.
The announcement focuses on the interoperability of messaging apps such as WhatsApp, Facebook Messenger and iMessage. During an almost eight-hour trilogue (trilogue discussions between the Parliament, the Council and the Commission), European legislators agreed that the biggest messaging services (such as Whatsapp, Facebook Messenger or iMessage) will have to open and interact with small messaging platforms, if they request it.
With the final adoption of the Digital Markets Act, we will finally hold the big online platforms accountable for their actions. The EU will thus change the online space worldwide. The Big Techs targeted by DMA are ubiquitous: we all use their services on a daily basis. However, their power increases to an extent that harms competition. With DMA, we will ensure fair competition online, more convenience for consumers and new opportunities for small businesses,” said Ivan Barto, Deputy Prime Minister for Digitization and Minister for Regional Development.
They must now:
- ensure that unsubscribing from core platform services is as easy as subscribing;
- ensure that the basic functionalities of instant messaging services are interoperable, i.e. allow users to exchange messages, send voice messages or files through messaging applications;
- give business users access to their marketing or advertising performance data on the platform;
- inform the European Commission of their acquisitions and mergers.
Here is, below, what the GAFAM will no longer do:
- rank their own products or services higher than those of others (self-referencing);
- preinstall certain applications or software, or prevent users from easily uninstalling such applications or software;
- require the most important software (eg, web browsers) to be installed by default when installing an operating system;
- prevent developers from using third-party payment platforms to sell apps;
- reuse private data collected during a service for the needs of another service.
As said before, if a large online platform is identified as Big Tech, it will have to comply with the DMA rules within six months. Users on small or large platforms will then be able to change messages, send files or make video calls through messaging apps, giving them more choices. With regard to the interoperability obligation for social networks, the co-legislators agreed that such interoperability provisions will be evaluated in the future.
Parliament has also ensured that the combining of personal data for the purpose of targeted advertising is only permitted with the explicit consent of the gatekeeper. They also succeeded in including a requirement to allow users to freely choose their browser, their virtual assistants or their search engines.
If an access controller does not comply with the rules, the Commission can impose fines of up to 10% of its total worldwide turnover for the previous financial year, and 20% in the event of repeated infringements. In the event of systematic infringements, the Commission can prohibit them from acquiring other companies for a certain period of time.
From now on, they will have to demonstrate that they also allow fair competition on the Internet. The new rules will help enforce this basic principle. Europe thus guarantees more competition, more innovation and more choice for users. With the Digital Markets Act (DMA), Europe is setting standards for the functioning of the digital economy of tomorrow. It is now up to the European Commission to quickly implement the new rules.
If a gatekeeper violates the rules established by the DMA, they could be fined up to 10% of their total worldwide revenue. In the event of a repeat offense, a fine of up to 20% of its worldwide turnover may be imposed. If a Big Tech is consistently non-compliant with the DMA, i.e. if it breaks the rules at least three times in eight years, the European Commission can open a market investigation and, if necessary, impose behavioral remedies or structural.
On 25 November 2021, less than a year after the start of negotiations in the Council, member states unanimously approved the Council’s position on DMA.
On March 24, 2022, the Council and the European Parliament reached a provisional agreement on ADL, which was endorsed by representatives of EU member states on May 11, 2022. The provisional agreement on ASM to which the Council and the European Parliament reached on April 23, 2022 and which was adopted by the European Parliament on July 5 is expected to be adopted by the Council in September 2022.
After the Council approved the position of the European Parliament on July 18, the legislative act was adopted. After being signed by the President of the European Parliament and the President of the Council, it will be published in the Official Journal of the European Union and will start applying six months later.
Source: European Commission announcement
And you?
In general, what do you think?
Soon an alternative App Store on iOS? Do you really believe it or not?
What about the third-party payment system that Apple has fiercely fought for years?
Soon applications installed by default that users will be able to uninstall?
What measures are you most interested in?
See as well :
EU targets Big Tech with sweeping new antitrust legislation, after 16 months of negotiations
EU could start enforcing rules to regulate Big Tech in spring 2023, DMA should enable action against any breaches by gatekeepers