EU member states and the European Parliament introduced a new landmark law known as the digital markets act. The law aimed at curbing the dominance of giant US techs in European markets.
What is Europe’s Digital Markets Act?
The Digital Markets Act or DMA is for protecting consumers and giving rivals a better chance of survival against giant tech firms. In simple terms, it is a long list of dos and don’ts prepared by lawmakers in Brussels. “The agreement ushers in a new era of tech regulation worldwide. The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies,” stated Andreas Schwab. The German MEO was leading negotiations for the European Parliament.
The law is aimed at averting the years of court battles and paperwork needed for punishing the Big Tech for its monopolistic behavior. Once implemented, the EU will have unprecedented authority for keeping a check on the decisions of the tech giants. The DMA is going to face the final votes where ministers from all member states will be present. It will come to effect on January 1, 2023. However, companies are asking for an extension.
What does this mean for American tech giants?
The following are the key rules set up by the lawmakers for gatekeeping firms:
- Letting users choose a default search engine, web browser, and virtual assistant when they buy a new smartphone
- Gaining explicit consent to combine personal data to target ads
- Fines of as much as 10% of a company’s global annual sales will apply for an initial breach of the law, rising to 20% for repeat infringements. Companies that routinely violate the rules will will be on a temporary ban from conducting mergers and acquisitions.
- Making their messaging apps interoperable to prevent users from being tied to one network
- Ensuring fair access conditions for their app stores
- Banning the companies from ranking their own products higher than others
“The gatekeepers will now have to comply with a well-defined set of obligations and prohibitions. his regulation, together with strong competition law enforcement, will bring fairer conditions to consumers and businesses for many digital services across the EU,” stated Margrethe Vestager. Vestager is the EU’s competition chief. Once the EU implements the digital markets act, tech companies must show fair competition. “This is enforced more easily with the new rules. This means that the time of long antitrust cases, during which the authorities were lagging behind the big tech companies, is over,” summarised Schwab.