For the technology industry, or in any case for a part of it that aspires to operate in the EU, March 6 was a historic event. On this day, six of the world's largest companies had to comply with the EU Regulation on Digital Markets (DMA) – the most important regulatory act ever adopted in this field, The Guardian reports.
The regulation was fought by technology companies. PHOTO Shutterstock (Archive)
The purpose of the Digital Markets Regulation is to make digital markets in the EU more competitive and fairer. It sets new rules for 10 defined essential platform services, such as search engines, online marketplaces, app stores, advertising and online messaging, and provides new rights for European businesses and end-users.
The regulation was a long time in the making and was fought by these companies from the very beginning, claims Irish journalist John Naughton.
According to Naughton, “what's even more delicious is to see these giants reluctantly announce how they will comply with what they see as an exasperating infringement on their freedom to do whatever they want“.
This Regulation does not apply to all technology companies, but only to those with a market capitalization of more than 75 billion euros or which have at least 45 million users and an annual turnover of 7.5 billion euro in the EU.
Basically, only Alphabet, Amazon, Apple, Meta, Microsoft and ByteDance (the owner of TikTok) are targeted.
What obligations do companies have?
“Of course, the fact that five of the six are American companies has led to complaints that the Europeans have a hostile attitude towards the poor defenseless American giants.”the journalist specified.
The regulation provides for a number of serious obligations: companies will have to allow access on their platforms to third-party applications and app stores; to provide transparent advertising data; allow users to easily uninstall pre-installed software or applications; enable interoperability between different messaging, social networking and other services and be more transparent about how their algorithms rank and recommend content, products and services.
It also prohibits certain practices by technology companies: for example, favoring their own services over those offered by third parties, engaging in activities based on their own preferences, and using the private data of business users to compete against them.
“In other words, it ends technology business as usual,” says Naughton.
One aspect worth mentioning is that the Regulation is really powerful. It gives the European Commission the possibility to carry out market investigations and to apply fines of up to 10% of a company's annual turnover in case of non-compliance with the rules, and in case of recurrence, fines can reach up to 20% of global revenues .
“A Decisive Experiment”
“What will this mean for consumers and end-users of technology services in the EU? It depends on the companies and services they use. Android users will be able to choose which browser and search engine they want to use, and will receive more links to competing sites when they search Google for information such as flights and hotels. iPhone users will find that Apple's app store isn't the only place they can download apps, and that they'll have a wider range of browsers; they will also be able to use their phones to make contactless payments with services other than Apple Pay in banking and wallet apps.
Meta users will find that WhatsApp will allow them to see messages from other messaging services (like Signal) and that they will be able to unlink their Instagram and Facebook accounts.
Amazon users in the EU will find that they will be asked for permission to collect their data for personalized advertising. This will affect Amazon's ability to collect information from its entertainment services, which include Amazon Prime Video, IMDb and Twitch, as well as devices such as Kindle devices and Fire tablets, as well as app stores and operating systems“, said the Irish journalist.
“Today, society faces a real challenge, namely whether it is able to keep the power of technology under control. We know this is possible because China is already doing it. The question is whether liberal democracies are able to do so. The importance of the DMA is that it is the first time there is a real chance to do this. So this is a decisive experiment for the democrats, and much depends on its outcome” Naughton concluded.
