New rules in Europe to curb Big Tech’s market power start to apply

GAFAM giants will have marked their calendars today as the Digital Markets Act (DMA), the European Union’s plan to curb Big Tech’s market power, now technically comes into effect, after coming into force in November past

The next major milestone is a few months away, in early autumn, when the Commission will confirm which of the usual suspect tech giants will be subject to the bloc’s shiny new ex ante competition regulation regime. But the tech giants face a busy summer preparing their regional compliance strategies.

Quick recap: The DMA applies a fixed set of obligations to so-called “gatekeepers” of the Internet who meet specific, cumulative criteria: first, they must operate at least one “core platform service” (these include search engines online, social networking services, apps). stores, certain messaging services, virtual assistants, web browsers, operating systems and online brokerage services).

Second, they must be of a sufficiently large size and consolidated market position to fall under the scheme. This means reporting annual income in the European Economic Area that has reached or exceeded 7.5 billion euros in each of the last three financial years; or have an average market capitalization “or equivalent equivalent market value” that amounted to at least 75,000 million euros in the last financial year, in addition to providing a basic platform service in at least three EU member states.

Gatekeepers must also be a “significant gateway for business users to end consumers,” as the Commission puts it, which the DMA considers to be the case if the company in question operates a core platform service with over 45 million monthly active end users in the EU and over 10,000 annual active EU business users in the last financial year.

Finally, a consolidated and lasting position is presumed if the company meets the other criteria in each of the last three financial years. While the Commission may also apply a subset of DMA rules to companies, it suspects they will soon become gatekeepers.

Obviously, certain big names will hit the DMA threshold (Apple, Amazon, Google, Meta, and Microsoft seem pretty safe bets to be considered keepers). But we’ll have to wait a few months to see if the full list contains any surprises.

And in that regard, the European music streaming giant Spotify clearly does not expect to be one of them… but, hey, let’s see!

“Now that the DMA applies, prospective custodians who meet the established quantitative thresholds have until 3 July to notify the Commission of their core platform services. The Commission will then have 45 business days (until 6 September 2023) to decide whether the company meets the thresholds and to appoint the guardians After their appointment, the guardians will have six months (ie until 6 March 2024) to comply with the requirements of the DMA “, writes the Commission in a press release.

If you have a sense of déjà vu, it’s probably because EU lawmakers recently designated 19 Very Large Online Platforms (VLOPs) as subject to the DMA’s sister regulation, the Digital Services Act (DSA), which restarts the blog’s e-commerce governance regime. .

It is likely that some of the same companies that have already been appointed as VLOPs under the DSA will also be appointed custodians under the DMA, meaning they will accrue additional “specific obligations” in addition to the algorithmic transparency requirements required by the DSA.

The WFD’s “do’s and don’ts” are clearly aimed at ensuring that digital markets remain “open and contestable” by applying a fixed set of behavioral conditions to gatekeepers aimed at curbing family anti-competitive actions.

Examples of DMA obligations include limits on how control platforms can use third-party data along with requirements that they provide third-parties with data about the usage generated by their applications; prohibits auto-preference and indelible default applications or settings that are forced on consumers; interoperability requirements, including for gatekeeping messaging services; requirements that app stores do not block sideloading or require developers to use their own services (eg payment systems); and the prohibition of tracking users for targeted ads without consent, among other conditions.

Most of the list speaks to the Commission’s experience in Big Tech antitrust cases, such as several EU applications against Google. However, there were some later additions, by co-legislators in Parliament and the Council, such as messaging interoperability (which took many by surprise), as well as limits on ad tracking.

Similar types of conditions have already been applied to some tech giants in certain EU markets, using existing competition powers. Such as the Netherlands, which last year forced Apple to allow dating app developers to choose to use alternative payment systems.

Although Germany has been ahead of the curve ex ante domestically, after updating its own competition regime in early 2021, and already has some applications to a number of tech giants it has designated as “significant primordial” for local competition (such as Google).

Enforcement of EU data protection law is also finally curtailing Meta’s ability to force behavioral ads on users. So we’ve had a taste of bigger things to come as DMA fires on all cylinders.

The big change here is that conditions are applied up front, so the idea is to proactively regulate digital giants who have the power to set rules about others who need access to their core platform services and force – them to support the competition and sensitive to the needs of consumers (instead of favoring themselves); rather than antitrust regulators having to spend years investigating and accumulating evidence of abuse to bring cases against bad behavior before it can be stopped, usually long after the harm has been established, as has been the case in most of Europe under the classical regime (ex post) competition rules.

That said, pan-European regulation will take some time to apply. And there are ongoing concerns about the resources and preparedness of the Commission to put its courage in the place of deception and take on such an important oversight role by leaning on some of the most powerful platforms in the world.

Time will tell how much pushback the DMA gets from tech giants used to (mostly) operating as they please and/or lobbying like the damned when lawmakers suggest making changes that could interfere with their money-minting machines. It also remains to be seen how far the Commission is willing to stick to its guns and forcefully enforce a new digital world order (especially as the upcoming EU elections will reshape the bloc’s political power structures ‘next year, including the addition of new leaders who may not be). as committed to the approach as those who drafted the DMA).

We’re sure not to see any application to the guardians until next spring, as those appointed in September will have six months to get their house in order. But we may see some operational changes in preparation for the new rules. And possibly new business models emerging as, for example, ad tracking without consent becomes less and less viable for the big social media giants. Many legal actions to test the limits and value of DMA also seem inevitable. So the coming years in Europe will be filled with interesting new power struggles.

In the U.K., which left the bloc after the Brexit referendum vote, the government also recently signaled it will push ahead with a pre-restart to deal with anti-competitive tech giants. The suggested approach is for tailor-made (bespoke) conditions, per platform, in those with “strategic market importance”, rather than fixed obligations for all giants in the scope.

Source link
The European Union has approved new rules which aim to curb the market power held by Big Tech corporations in the region. These measures are seen by many as a long-needed step to increase competition in the digital sector and protect customers from malicious or unfair business practices.

One of the main elements of the new regulations is a “European Digital Services Act”, which aims to modernize the existing regulation of digital services, such as online marketplaces, search engines and cloud services. The act obliges large online platforms such as Google, Amazon and Apple to become more transparent about their platforms and how they work.

The new rules also set out how Big Tech firms must share data they hold. This is to ensure better competition between online businesses, help reduce costs and allow new companies to enter the market. The aim here is to create a fair and level playing field for digital services providers.

The rules are set to take effect next year and are part of a broader strategy to tackle the market power held by Big Tech firms. The goal is to create a safe and fair online environment that would be beneficial both to consumers and businesses.

Ikaroa is a forward-thinking technology firm that seeks to disrupt existing industry models. It is investing heavily in research and development in order to seize the opportunities created by these new regulations. The company designs and builds innovative products and services to support the ambitions of Europe’s digital entrepreneurs. By doing so, it aims to make a meaningful contribution to the move towards greater fairness, choice and trust in the digital marketplace.


Leave a Reply

Your email address will not be published. Required fields are marked *