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If the executives of the world’s largest technology companies are somehow still doubtful about the European Union’s approach to regulating digital markets, the European Commission on Monday (March 4) announced that The charges would have resulted in a fine of 1.8 billion euros ($1.95 billion) for Apple. It served as a powerful statement of intent through music streaming.
More new EU rules governing how Europe’s biggest online platforms operate will come into force this week, after the deadline for complying with the Digital Markets Act (DMA) has passed.
Starting today (March 7), the six tech giants designated as “gatekeepers” by the European Commission (Apple, Google parent Alphabet, Amazon, TikTok owner ByteDance, Meta, and Microsoft) will: It is required to comply with numerous legal amendments. Curb their global dominance.
These include outlawing companies that favor their own services at the expense of third-party providers and forcing other companies, such as apps, to provide access to the data their platforms generate. , which allows smaller services to contact customers directly and provides easier access for users. To switch services.
The law can impose fines of up to 20% of global gross sales (also known as gross profits) on repeat offenders, and in extreme cases, it can impose “final penalties” such as forced sale or division of the business. “Means of means” shall be applied.
It’s okay now
This change is already having a major impact on digital music services and, by extension, the global recording business.
Apple announced in January that it would allow European users to download app stores other than the one installed on their iPhones. Additionally, the fees charged to developers for purchases made through the App Store will also be lowered, with fees for developers using the company’s payment processing system ranging from 10% to 17%, down from the existing 15% to 30% level. be lowered to
However, for “high volume” services with over 1 million users, App Store alternatives will be charged a “core technology fee” of €0.50 ($0.54) per year per download. Apple’s plan has been heavily criticized by many European companies. , Spotify and Deezer.
“Apple’s new terms not only ignore both the spirit and the letter of the law, but if left unchanged, they will make a mockery of the DMA,” the streaming service said in a letter sent last week, which also received 32 people. This was stated in an open letter to the European Commission, which it signed. Other European digital companies and associations, including industry association Digital Music Europe.
Spotify and Deezer said the new pricing structure, which only applies to the 27 EU member states, would prevent app developers from opting into the revised terms and “impede fair competition”, adding that they wanted regulators to “promptly “We called on Apple to take timely and decisive action.” (Spotify said in a blog post in January that the new fees are “equivalent to or less than the old rules.”)
Following Spotify’s long-standing complaints about Apple’s restrictions on outside developers and its 30% fee on all purchases made through its iOS apps, the European Commission announced in early March that Apple Similar anti-competitive concerns were behind the decision to impose a €1 billion fine. (Apple said it would appeal the fine, which was imposed under existing EU conditions rather than Digital Markets Law).
Defending its response to the EU’s new regulations, Apple estimates that less than 1% of developers pay core technology fees, and the DMA will limit users and developers by undermining its ability to detect external malware, fraud and illegal content. warned that it posed a huge risk to people. App.
Not just Apple
Other so-called gatekeepers (defined by policymakers as platforms with annual sales of more than 7.5 billion euros ($8.1 billion) and more than 45 million monthly active users within the EU) also use DMA.
Aside from Apple, music industry executives will be most interested in how ByteDance, TikTok’s Chinese owner, responds to the law’s provisions. In November, the company challenged the EU’s classification of TikTok as a “gatekeeper”, saying the platform was “a challenger rather than an incumbent in the digital advertising market” and that the new rules meant it would be unable to “survive”. It was argued that this could hinder the Increase your competitiveness and grow. ”
Despite ongoing legal challenges, TikTok has already taken a number of steps to comply with the terms of the DMA, including allowing developers to transfer data profiles, followers, and posts from TikTok to others. It also includes the launch of enhanced data portability tools that allow users to download and export data to the service. User permissions. These changes are currently rolling out to users in Europe, and TikTok announced in a March 4 blog post that it has “plans to roll it out globally in the near future.”
Alphabet, the parent company of Google and YouTube, announced in January that it would allow users to choose a default browser when searching on Google and provide more links to competing sites, but like Apple, Alphabet DMA compliance is being questioned.
Epic Games CEO Tim Sweeney took to X (formerly Twitter) this month to criticize tech giants for charging up to 27% fees on app purchases made without using Google’s payment services. did. (Google/Alphabet has so far been hit with three major fines totaling 8.2 billion euros from the EU over antitrust issues.)
Meta, on the other hand, allows users to separate their Facebook and Instagram accounts to prevent personal information from being shared for targeted advertising. Amazon is making changes to its Amazon Ads service to provide stronger data protection for its customers, and Microsoft is making changes to its Windows operating system.
Although the provisions of the Digital Markets Act only apply to companies and services operating in the 27-member EU bloc, their impact is far-reaching. Following the EU’s lead, several other countries, including Japan, South Korea, India, Brazil, Australia and the United Kingdom, are developing similar regulations to curb the dominance of technology companies.
Until we get a sense of how the DMA and comparable international laws will actually have a meaningful impact on reining in Big Tech and the music companies that promote or rely on Big Tech to reach their audiences. That could take years, but EU regulators insist otherwise. Avoid challenges.
“We look very closely at how companies comply. [with the DMA]”Once we obtain full enforcement powers, we will act without hesitation,” the European Commission said in a recent statement.
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