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European regulators have agreed on a Digital Markets Act that would impose a number of new requirements on Big Tech companies classified as “gatekeepers”. Final votes on the legislation are still pending.
The text tentatively agreed by Parliament and Council negotiators is aimed at large companies providing so-called ‘core platform services’ that are most prone to unfair trading practices, such as social networks or search engines, with a market capitalization of at least 75 billion euros or an annual turnover of 7.5 billion,” the European Parliament announced yesterday. “To be classed as ‘gatekeepers’, these companies must also provide certain services, such as browsers, messengers or social media, which have at least 45 million monthly end users in the EU and 10,000 business users per year.”
Google, Apple, Amazon, Facebook owner Meta and Microsoft should apparently abide by the new rules. “The Digital Markets Act puts an end to the ever-increasing dominance of big tech companies. From now on they must show that they also enable fair competition on the internet,” said Andreas Schwab, a Member of the European Parliament from Germany and rapporteur for Parliament’s Committee on the Internal Market and Consumer Protection.
EU lawmakers agreed that major messaging services such as WhatsApp, Facebook Messenger and Apple’s iMessage “will have to open up and partner with smaller messaging platforms, if they so request. Users of small or large platforms would then be able to exchange messages, send files, or make video calls.” through messaging apps, giving them more choice,” the European Parliament announcement reads. The wording makes it unclear whether the largest messaging apps should work with each other or just with smaller competitors.
The legislators agreed that specific interoperability requirements for social networks “will be assessed in the future”. Another provision says that “combining personal data for targeted advertising is only allowed with the express permission of the gatekeeper.”
“If a gatekeeper does not follow the rules, [European] The Commission can impose fines of up to 10 percent of its total worldwide turnover in the previous financial year, and 20 percent for repeated violations. In the case of systematic infringements, the Commission may prohibit them from acquiring other companies for a period of time,” the announcement said.
App Store Alternatives
The Hollywood Reporter described some of the practical implications of the new rules. For example, Apple will have to allow alternatives to its App Store for downloading apps and allow payment methods for the App Store other than Apple’s, the article said. It continued:
Google and Meta, the parent company of Facebook and Instagram, can no longer serve targeted ads across multiple platforms, using data collected when users switch between services of the same company, YouTube and Google Search, without explicit consent.
Amazon may not use data collected from third-party sellers about its services to offer competing products, a practice that is already the subject of a separate EU antitrust investigation.
The legal text has yet to be “completed at” [the] technical level and reviewed by lawyer-linguists” and then approved by the European Parliament and Council, the Parliament announced. The Digital Markets Act would then “enter into force 20 days after publication in the Official Journal of the EU and the rules will be six months thereafter.”