The European Union (EU) has confirmed the first six technology companies that will be subject to its strict new competition laws, known as the Digital Markets Act (DMA). These companies are Alphabet (Google), Amazon, Apple, ByteDance (TikTok), Meta (Facebook, Instagram, WhatsApp), and Microsoft.
The DMA is designed to address the concerns of competition regulators, who have long argued that large technology companies have too much power and that this is stifling innovation and competition. The law defines a “gatekeeper” as a company that provides an important gateway between businesses and consumers in relation to core platform services.
Gatekeepers must comply with a number of new obligations under the DMA, including:
- They cannot favor their own products and services over those of their rivals.
- They cannot make it difficult for users to switch to other platforms.
- They cannot prevent users from uninstalling their apps.
- They must allow third-party apps to interoperate with their services in certain situations.
The DMA also gives the EU the power to fine gatekeepers heavily if they break the rules. Fines can be as high as 10% of a gatekeeper’s global turnover for a first offense, and 20% for repeat offenses. The EU can also force gatekeepers to sell off businesses and block them from acquiring related services in cases of systematic DMA violations.
The DMA is likely to have a major impact on the way that technology companies operate in the EU. For example, Apple may have to allow users to download apps from outside of its App Store. Meta may have to make it easier for users to switch to other messaging apps, such as WhatsApp. And Google may have to give users more control over how their data is used.
The DMA is a significant step forward for consumer protection in the EU. It is designed to ensure that technology companies cannot abuse their power and that consumers have more choice and control.
In addition to the above, here are some other potential impacts of the DMA:
- The DMA could lead to lower prices for consumers, as technology companies will be forced to compete more vigorously.
- The DMA could boost innovation, as technology companies will be incentivized to develop new products and services that are compatible with other platforms.
- The DMA could give smaller technology companies a better chance to succeed, as they will no longer be facing unfair competition from gatekeepers.
- The DMA could make it easier for users to switch between different technology platforms, which could lead to a more competitive and open digital market.
The DMA is still in its early stages, and it remains to be seen how it will be implemented and enforced. However, it has the potential to be a major game-changer for the technology industry in the EU.