EU targets Meta, Google, and 4 other tech giants with new digital market rules

EU targets Meta, Google, and 4 other tech giants with new digital market rules

European Commission Targets Tech Giants with Digital Markets Act

The European Commission has taken a significant step towards ensuring a fair and open digital market by announcing its Digital Markets Act (DMA). This landmark pro-competition regulation aims to control the market power of six tech giants, which have been designated as “gatekeepers” of the EU’s digital market.

So, who are the notorious six? Well, it’s no surprise that the usual suspects are on the list:

  • Alphabet
  • Amazon
  • Apple
  • Meta
  • Microsoft
  • ByteDance

These companies have been deemed gatekeepers based on specific criteria. They must be active in at least three member states, have over 45 million monthly end users, more than 10,000 business users annually, and achieve an annual turnover of at least €7.5 billion or a market capitalization of at least €75 million.

The EU has also identified 22 core platform services of these gatekeepers that will be subject to the new strict rules outlined in the Digital Markets Act. Let’s take a closer look at which services fall under each company:

Alphabet: Chrome, Android, YouTube, Google Search, Google Maps, Google Play, Google Shopping, and Google Ads.

Amazon: Amazon Marketplace and Amazon Ads.

Apple: Safari, iOS, and App Store.

ByteDance: TikTok.

Meta: Facebook, Messenger, Instagram, WhatsApp, Meta Marketplace, and Meta Ads.

Microsoft: LinkedIn and Windows PC OS.

These designated services will need to comply with a range of obligations and restrictions. For instance, gatekeepers will be required to allow consumers to uninstall pre-installed apps and replace them with third-party alternatives. Business users will also have the freedom to promote and sell their products on their own sites.

In an effort to protect user privacy, the selected 22 core platform services are banned from tracking users outside of their platforms for targeted advertising purposes, unless prior consent has been obtained.

The gatekeepers have been given six months to meet the requirements set forth by the DMA. Failure to do so could result in fines of up to 10% of the companies’ total worldwide turnover. In cases of repeated breaches, fines can increase to 20% of the aforementioned amount. The Commission is also empowered to take additional measures, including forcing a gatekeeper to sell part of its business.

It’s worth noting that the gatekeeper list is not static and can be updated with the addition or removal of companies.

Commissioner for Internal Market, Thierry Breton, commented on the significance of the DMA, stating, “More choice for consumers, fewer obstacles for smaller competitors: the DMA will open the gates to the Internet.” He emphasized that the designation of these six gatekeepers marks a pivotal moment in reining in their economic power. With the DMA in place, consumers can expect more options, while smaller innovative tech companies will have newfound opportunities thanks to measures such as interoperability, sideloading, real-time data portability, and fairness.

The Digital Markets Act represents a major stride towards fostering a fair and competitive digital market in the European Union. It aims to level the playing field by curtailing the excessive market dominance of tech giants and creating an environment that encourages innovation, choice, and consumer protection.