LONDON: The EU’s new Digital Markets Act, a set of major regulations designed to curb the dominance of big tech companies that could dramatically change the European tech landscape, comes into force on Tuesday.
The DMA aims to ensure that gatekeeper firms such as Google, Apple, Meta and Amazon engage in fair practices online and do not abuse their position.
Under the new law, tech companies of large size and influence could be forced to open up their services to other companies and developers.
The European Consumer Organisation, BEUC, an umbrella organization that brings together 45 European consumer organizations from 32 countries, called the act “a landmark law for the EU’s digital transformation.”
Ursula Pachl, deputy director general at BEUC, said: “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.”
Experts predict that one of the service areas that is likely to be most impacted by the new act is going to be internet messaging.
The DMA allows new messaging services to demand interoperability which is the ability to exchange messages, from the internet's largest messaging services.
That means that smaller messaging apps will be able to request that tech gatekeepers allow their users to send and receive messages via the bigger firm’s platforms.
In order to promote competition and prevent monopolists from shutting down user-empowering innovation, gatekeepers may also be required to allow their users to choose different app stores.
“If you have an iPhone, you should be able to download apps not just from the App Store but from other app stores or from the internet,” said the director of a new regulatory EU office in San Francisco, Gerard de Graaf.
The DMA, which is now moving into a six-month implementation phase and will start being applied from May 2, 2023, was met with a lot of skepticism by big techs and industry experts.
Some analysts have argued that requiring interoperability for end-to-end encrypted messaging services raises particularly difficult security and privacy concerns, which must be addressed before interoperability requirements are imposed on those services.
“While we believe that the DMA’s purposes are laudable, and while there are provisions we support, we are very concerned that the DMA’s rigid, one-size-fits-all approach to a diverse set of products, markets and companies will undermine important protections for consumers and lead to less opportunity and less choice across Europe,” said Apple in a statement.
The DMA imposes a number of obligations on firms identified as gatekeepers, such as allowing users to install third-party apps or app stores and prohibiting firms from ranking their own products or services higher than competitors.
The new law will also prohibit firms from forcing apps and developers to use the gatekeeper’s services (such as payment systems) in order to appear in the gatekeeper’s app stores, as well as firms from tracking what users do away from their platform for the purpose of targeted advertising without the user’s permission.
Although the act does not name specific gatekeepers, the commission has already established the criteria by which companies will be designated as such, aiming to decide which firms will fall under its remit by the Sept. 6, 2023 at the latest.
Companies that fail to comply with the DMA may face fines of up to 10 percent of their annual global turnover for the first infringement, and up to 20 percent for subsequent violations.
In recent years, EU policymakers have sought to curb the dominance of big tech through a series of legislative proposals.
The DMA is the most sweeping legislation to regulate tech since a European privacy law was passed in 2018, and many experts expect it will lead to significant changes in how tech firms operate not just inside the European block, but across the world.