Tech giants such as Meta, Google and Amazon are now privy to new regulations, as the EU enshrines rules to curb anti-competitive practices by the world's largest tech companies nearly one year after they were announced.
Big tech. Credit: Ascannio / Shutterstock
Credit: Ascannio / Shutterstock
The Digital Markets Act (DMA) will primarily look to tackle growing monopolies, partially to allow for EU companies to compete in a market dominated by US-based firms.
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These tech giants will be subject to regulations, obligations and prohibitions not present for smaller companies, while also offering a way for EU officials to enforce these rulings. The current threshold for these regulations is for companies with a market value of over €75 billion.
This, alongside the Digital Services Act, has reportedly been created to increase transparency in the tech sector and make online markets fairer.
The European Commission has been looking to clamp down on so-called "big tech" companies for a few years, focusing on their ability to corner markets and buy out or flush out competition.
Internally, these companies are known as "gatekeepers" and are the main focus of the bill.
The EU has also looked to stem the spread of "fake news", particularly regarding misinformation about the Covid-19 pandemic that easily spreads through social media.
In recent years, the Commission has been embroiled in several antitrust lawsuits against companies such as Google and Amazon over unfair business practices.
“What we want is simple: Fair markets also in digital. We are now taking a huge step forward to get there - that markets are fair, open and contestable," EC Executive Vice President Margrethe Vestager said regarding the ruling.
In a speech to the European Parliament following the ruling, Vestager talked about the road the Commission has been on in securing the Digital Markets Act.
"The thing is that what we have learnt over these years is that we can correct in specific cases, we can punish illegal behaviour, but when things become systematic, then we need regulation as well," she revealed
"For companies that play a role as gatekeepers, now the Digital Markets Act will set the rules of the game. This is similar to what has been done a long time ago in sectors such as banking, telecoms, energy, transport where regulation and competition rules work hand in hand.
"I am pleased to be here with co-legislators and satisfied that they've kept the main architecture of our proposal – the centralised enforcement at EU level, a designation process to identify “gatekeepers” that are in scope and a series of do's and don'ts imposed on them," she added.
The DMA is set to be enforced both at national and EU levels. This means any breaches within one member state can be tackled by the government of that state and brought to the EU.
New interoperability requirements have also been added to the Act for messaging services such as WhatsApp or Facebook Messenger. The term 'interoperability' pertains to the ease with which a system can exchange information and data with other systems and external hardware.
In this case, it is likely that these messaging services will be required to share some information.
Read more: Big Tech threatened with sanctions if they refuse to work with the EU
The DMA also mandates bans on the gathering of private data for targeted advertisements, an allegation that has long been associated with social media platforms such as Facebook.
In addition, the scope of sanctions available to companies that do not comply with EU rules has been widened. Previously, the worst punishments dished out to tech giants were hefty fines, although Vestager did not elaborate on how they had been extended.
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