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New EU rules restrict IT giants

EU legislation has tasked major online platforms with the role of “watchdogs”
(photo: CC0 Public Domain)

The legislators of European Union introoh new rules that limit pthe market power of the big tech companies. In September, the EU will approve internet platformstheysubject to the new restrictions in The Digital Markets Act (DMA)who will receive the status of “guards”. However, the terms of the new competition regulation regime have been put in place in advance – companies now have to bring their businesses into line with them.

Some big names like Apple, Amazon, Google, Meta, and Microsoft will apparently be given “DMA gatekeeper” status, notes TechCrunch. The law applies a fixed set of obligations to so-called “watchmen” who meet certain cumulative criteria.

Firstthey must operate at least one “core platform service” – search engines, social networks, app stores, certain messaging services, virtual assistants, web browsers, operating systems and online intermediary services.

Second, the “gatekeepers” must be sufficiently large and established in the market to be subject to regulation. This means that their annual revenue in the European Economic Area must be equal to or greater than €7.5 billion in each of the last three financial years, have an average market capitalization or “equivalent fair market value” of at least €75 billion in the last financial year, as well as to provide services on the main platform in at least three EU Member States.

Examples of obligations by DMAs include:

  • restrictions on the platforms to use data from the so-called “third parties” as well as require “third parties” to provide usage data for their applications;
  • prohibitions on self-use of links and imposition of applications or default settings on users;
  • compatibility requirements, including for messenger services;
  • requiring app stores not to block downloads by “third parties” and not require developers to use their own services (eg payment systems);
  • prohibition of tracking users for the purpose of targeted advertising without their consent, etc.

“Guardians” should also be “an important gateway for business users to end users”. According to the European Commission, the DMA regime comes into effect if the company in question provides services on a major platform with 45 million monthly active EU end users and more than 10,000 annual active EU business users in the last financial year.

EU lawmakers have recently identified 19 Large Online Platforms (VLOPs) that fall under the DMA’s sister regulation, the Digital Services Act (DSA). The document “reboots” the e-commerce management regime for large companies. It is likely that some of these tech giants, which have already been named VLOPs under the DSA, will also be affected by the DMA, meaning they will have additional “specific obligations” on top of the DSA’s algorithmic transparency requirements.

The new rules are clearly aimed at ensuring that digital markets remain “open and competitive” by imposing a fixed set of behavioral conditions on companies. The big change here is that the conditions are applied up front – the idea is to actively regulate the digital giants, who have the right to set rules for other companies needing access to their core services. The rules force the “gatekeepers” to maintain competition and consider the needs of consumers.

However, the introduction of European-wide regulation will take some time. There are also concerns about how prepared the Commission is to show its courage and take on such an oversight role by regulating some of the world’s most powerful platforms.

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