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Europe is staking its claim to be the world’s digital police with a series of new laws aimed at regulating the world’s biggest technology companies. The Digital Markets Act (DMA) follows last year’s Digital Services Act, which targets social media abuse. The law, which came into effect on March 7, has the broader goal of combating unfair competition and preventing so-called digital market domination. Gatekeepers profiles the internet giants, from Alphabet and Apple to Meta, Microsoft and TikTok. [This week, the European Parliament also passed the AI Act, the world’s first broad legislation regulating artificial intelligence, but those laws won’t fully take effect until mid-2026.]
The DMA is already transforming the way big tech companies do business in Europe, and given the tendency for EU digital laws to become global standards, Anu Bradford of Columbia University Law School said, “The Brussels effect is Europe has become a testing ground for future technologies. Digital marketplaces vary from how video games are sold online to information that can be used for targeted advertising and user communications between platforms and devices, such as sending videos from an iPhone to an Android device or texting between iMessenger and an Android device. It affects everything from the ease of Whatsapp.
Although the law is complex, platforms commonly designated as “gatekeepers” must have a market value of €75 billion ($81.7 billion) or annual revenues of at least €7.5 billion ($8.17 billion) within the EU. , at least 45 platforms. With 1 million monthly end users on at least one core platform, you can ensure that your services treat your competitors fairly and that your customers will enjoy the benefits of your digital services, no matter what hardware or operating system they use. You need to take active steps to be able to choose between them. The DMA will initially apply to six “gatekeeper” companies: Alphabet, Amazon, Apple, TikTok owner ByteDance, Meta, and Microsoft.
Rather than wait for evidence that market dominance is harming consumers and use traditional antitrust law to correct it (as U.S. regulators employ to reign in big tech) In the words of European countries, Europe is trying to ensure that it stays ahead of the digital market. Commission, ‘level playing field’ for companies in the digital sector. Europe is more advanced than the U.S. when it comes to digital regulation, but stops short of banning individual services or platforms, with the House passing a bill that would apply to TikTok if ByteDance refuses to sell its U.S. operations. I just did it.
In Europe, the message to big tech companies is that “with power comes responsibility,” European Commission Competition Commissioner Margrethe Vestager said at SXSW on March 11. He said he was prepared to punish. The DMA includes penalties of up to 10 percent of a company’s global turnover if the EU violates the DMA for the first time, and double that amount for repeat violations. To get an idea of the scale of these penalties: If Meta violates the DMA rules, the first violation could cost the company $13.4 billion (10% of the company’s 2023 global sales of $134 billion) There is a gender.
As if to show that it means business, the EU on March 4 banned rivals like Spotify from telling users how to pay for cheaper subscriptions abroad, and banned its own music streaming services. Apple was fined 1.8 billion euros ($2 billion) for unfairly favoring its services. iPhone app. In a separate antitrust case against Google, the European Union sued the company for 2.42 billion euros ($2.64 billion) for favoring its price comparison shopping service over smaller European competitors.
Both Apple and Google are appealing the fines.
However, in a similar DMA-related dispute with Epic Games, fortniteApple has reversed and reversed its previous decision to block the Epic Games app store for iOS, which bypasses Apple’s online store.
Epic Games CEO Tim Sweeney said in a March 9 tweet that Apple’s reversal marks “a huge victory for the rule of law in Europe.” Epic Games said on its website that it had sent a strong signal that the “European Commission will act swiftly to enforce digital market law and hold gatekeepers accountable.”
Before the European law came into force, and before its full impact could be assessed, governments from London to Tokyo rushed to create their own copycat versions of the DMA. This is a repeat of what happened with Europe’s General Data Protection Regulation (GDPR) privacy law, which was enacted in 2018 and which has led to at least 150 similar laws around the world, including California’s consumer privacy law. It became a model for regulation.
“We’re already seeing copies or variations of this Digital Markets Act popping up in places like Japan, the UK, Brazil, Mexico and even India,” said Bill Echikson, senior fellow at the European Center think tank. he says. Policy Analysis (CEPA). “In a democratic world, [the DMA] It will become the de facto standard. ”
Smaller European media companies, in particular, hope that the DMA will help them break the dominance of international media giants in the digital market. Prior to the enactment of the bill, Germany’s two largest commercial television companies, RTL Deutschland and ProSiebenSat. We have launched a joint ad tech partnership to provide capabilities that can be implemented.
But Echikson warned that the DMA could be counterproductive and actually serve to “strengthen gatekeeping,” as global tech giants could use their advantageous position to lock out competitors. ing.
“What I’m hearing about DMA is that with the changes that Google is making to search, for example, people are going to have to spend more on advertising to stay at the top of search results. [so] Google will get more business from this,” Echikson said. “I’m not sure [the DMA] It will be particularly successful in opening up the market to European competitors. ”
EU regulatory crackdown: highlights
July 2021 – Amazon has been fined €746 million ($888 million) for violating the EU Data Protection Regulation (GDPR).
September 2022 – Google has been fined 4.12 billion euros ($4.13 billion) for using its Android mobile operating system to disrupt rivals.
April 2023 – Ireland’s data regulator has fined TikTok €345 million ($377 million) for breaching EU data laws in its handling of children’s accounts.
May 2023 – Meta was fined €1.2 billion ($1.3 billion) for violating the GDPR.
June 2023 – Microsoft revealed it had set aside $425 million in anticipation of fines it expects to receive from the Irish data regulator for GDPR violations by its LinkedIn subsidiary.
March 2024 – Apple fined music streaming providers €1.8 billion ($2 billion) for violating App Store rules.
(Note: Fines may be reduced or canceled on appeal.)
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