Europe finalizes DMA forcing US tech cos to change business practices

Google, Amazon, Apple, Meta and Microsoft will be forced to change their core business practices in Europe as EU countries and EU lawmakers on Thursday finalized Digital Markets Act (DMA) rules to curb their powers.
digital use of laptopsFrance, which currently holds the rotating EU presidency, said in a tweet that there was a provisional agreement after eight hours of talks.

EU industry Chief Thierry Breton said in a tweet that the deal would ensure fair and open digital markets.

“What we want is simple: fair markets also in digital. Large gatekeeper platforms have prevented businesses and consumers from the benefit of competitive digital markets,” EU antitrust chief Margrethe Vestager, who proposed the rules just over a year ago, said in a statement.

“This means that the time of long antitrust cases, during which the authorities were lagging behind the big tech companies, is over,” said EU lawmaker Andreas Schwab, who had steered the debate in the European Parliament.

New EU rules regulating U.S. tech giants will likely influence to set global standard, Reuters news report said.

The DMA sets out a list of dos and don’ts targeting each tech giant’s core business practices. “DMA is here to stay and will be quickly mirrored in a number of countries. The flexibility that big tech had will be constrained, as the regulatory ‘straitjacket’ will get tighter globally,” said Ioannis Kokkoris, competition law professor at Queen Mary University in London.

The Digital Markets Act (DMA) sets out rules for online gatekeepers – companies that control data and platform access.

It will cover gatekeepers in online intermediation services, social networks, search engines, operating systems, online advertising services, cloud computing, video-sharing services, web browsers and virtual assistants.

Under the DMA, the tech giants will have to make their messaging services interoperable and provide business users access to their data. Business users would be able to promote competing products and services on a platform and reach deals with customers off the platforms.

The rules prohibit the companies from favoring their own services over rivals’ or preventing users from removing pre-installed software or apps.

The DMA will apply to companies with a market capitalisation of 75 billion euros, 7.5 billion euros in annual turnover and at least 45 million monthly users.

Companies face fines up to 10 percent of their annual global turnover for breaching the rules and as much as 20 percent for repeat offences.

Apple, which has lobbied intensively against the DMA, reiterated its worries.

“We remain concerned that some provisions of the DMA will create unnecessary privacy and security vulnerabilities for our users while others will prohibit us from charging for intellectual property in which we invest a great deal,” Apple said in a statement.

Google, which also cranked up its lobbying in the last year, echoed the same sentiments.

“While we support many of the DMA’s ambitions around consumer choice and interoperability, we’re worried that some of these rules could reduce innovation and the choice available to Europeans. We’ll now take some time to study the final text, talk with the regulator and work out what we need to do to comply,” Google said in a statement.

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