(VOVWORLD) - The EU’s Digital Markets Act, an attempt to get tough with controversial business practices of giant technology corporations, took effect on March 7.
 (illustrative photo: AFP/VNA) |
The Digital Markets Act (DMA) was enacted and enforced by the EU late last year, but EU regulators set a 6-month deadline for six giant technology corporations to make changes to comply with the Act before it officially took full effect on March 7.
Control of Big Tech is strengthened
The DMA aims to curb six tech giants, which it calls the “gatekeepers”: Alphabet, Amazon, Apple, Meta, Microsoft, and ByteDance (China).
22 platform services, including Apple's App Store, Meta's Facebook, Instagram and WhatsApp, Google’s YouTube and Chrome browser, Apple's Safari, and ByteDance’s Tik Tok will come under the scope of the new regulations.
If found breaking competition laws, lacking content control, or providing false information, a company can be fined 10-20% of its global revenue – and banned from certain activities if guilty of repeated violations. This strong move by the EU against the tech giants follows years of heated debate around competition and business practices considered unfair by the EU.
On March 4th, the EU imposed an antitrust penalty on Apple, fining it nearly 2 billion USD for breaking competition laws by unfairly favoring its own music streaming service over rivals. In a press release on Monday, the EU Commission said its investigation found that Apple bans Spotify and other music streaming app developers from informing iOS users about alternative and cheaper music subscription services available outside of the App Store, and preventing them from sharing instructions on how to subscribe to such services.
 Margrethe Vestager, EC’s Executive Vice-President (photo: AFP/VNA) |
Margrethe Vestager, EC’s Executive Vice-President in charge of competition policy, asked Apple to lift restrictions on App Store to comply with the DMA. “It is of fundamental importance to hold companies like Apple accountable for their violations of EU law. If Apple abuses its dominant position, we will detect such illegal behaviour, we will bring it to an end, and we will punish Apple for it.”
Tech experts say that, with full enforcement of the DMA, tech giants like Apple and Alphabet will be forced to allow iPhone users in Europe to download applications available outside the App Store. And they will not be forced to use default options for major services. The regulation ends the situation where Apple products are only associated with the Safari browser and the Android operating system is only associated with Google's Search engine. Microsoft must stop forcing users to use its Edge browser. Internet searching will also change. Some Google search results will appear differently because the DMA prohibits tech companies from prioritizing their own services.
Users have the right not to allow companies to use their personal data for advertising purposes. Meta must allow Facebook accounts to be separated from Instagram accounts, so the corporation cannot combine user data collected from both platforms to selectively push advertisements at users.
Opportunities for small tech companies
Besides limiting the growing power of tech giants, the DMA promotes the development of small and medium-sized tech companies. Christophe Carugati, an expert with Digital Competition, said small tech companies in Europe will benefit greatly from the DMA by having more options and space to develop.
EC Vice President Margrethe Vestager said: “The benefit of the DMA is for all market participants because the entire point of the DMA is for the market to be open for innovation, for competition, and for consumer choice.”
Sophie Dembinski, Advertising Director at Ecosia, an Internet search engine development company in Germany, says the DMA is the correct strategy, but it’s too early to say if there will be major changes to market shares. Tech corporations covered by the DMA are preparing legal moves to fight back. Apple says EU regulations force it to adjust the iOS operating system, Safari browser, or App Store will expose users and developers to greater security risks, because third parties can install harmful applications, commit fraud, and violate users' privacy.