New EU Tech Regulations to Bring Overhaul for Big Tech Companies including Microsoft, Google, and Meta: In-Depth Information

Technology

When the EU designates a company as a ‘gatekeeper,’ it will be required to ensure its services can work seamlessly with competitors and allow users to choose which apps to pre-install on their devices.

The European Union has identified 22 designated “gatekeeper” services, operated by six of the world’s largest tech companies, to be subjected to new regulations in its latest crackdown on Big Tech. The comprehensive Digital Markets Act (DMA) will be applicable to services offered by Alphabet, Amazon, Apple, Meta, Microsoft, and TikTok’s owner, ByteDance.

Considered by many as a companion to the Digital Services Act (DSA), which places increased responsibilities on tech companies for the content shared on their platforms, the DMA aims to level the competitive landscape between Big Tech corporations and smaller rivals.

These tech giants now have a six-month window to adhere to the DMA’s provisions, which seek to enhance accessibility and service compatibility within Europe, presenting an unprecedented challenge to their business models. According to the DMA, companies boasting over 45 million monthly active users and a market capitalization of €75 billion ($82 billion) are deemed gatekeepers offering essential platform services.

Businesses holding this classification will be obliged to ensure interoperability of their messaging apps with competitors and allow users to choose which apps to pre-install on their devices.

Among these gatekeepers, Google, under Alphabet, has the highest number of services subject to stricter regulations, including its Android operating system, Maps, and Search. Meta’s platforms, including Facebook, Instagram, Marketplace, and WhatsApp, also meet the gatekeeper criteria. Companies failing to comply with their obligations may face fines of up to 10% of their annual global turnover for DMA violations.

Gatekeepers can request an interim measure to suspend the application of these rules, but they would need to initiate legal proceedings in the EU Court of Justice in Luxembourg to do so, according to a senior Commission official. However, no such requests have been made thus far.

Following the introduction of the separate legislation, the Digital Services Act, Zalando took the Commission to court in June. EU industry chief Thierry Breton expressed, “It’s D-Day for #DMA!” on Twitter (formerly known as X), highlighting that the most influential online companies must now adhere to EU regulations.

A Microsoft spokesperson acknowledged the gatekeeper designation, while spokespersons from Meta, Google, and Amazon stated that they were reviewing the designations. However, Apple and Ticktock expressed reservations. Ticktock disagreed with the decision fundamentally and expressed disappointment that no market investigation preceded it, while Apple expressed concern about the privacy and data security risks posed by the DMA.

Apple had previously raised concerns that the DMA could lead to increased installation of apps outside of Apple’s App Store through a process known as “side-loading.”

Stavroula Vryna, a partner at law firm Clifford Chance, emphasized the need for the Commission to balance user security and privacy with the risk that gatekeeper app stores might use security and privacy as excuses to dilute their DMA obligations.

Alphabet’s Gmail, Microsoft’s Outlook, and Samsung’s browser were exempted from DMA regulation, as these companies provided justified arguments demonstrating that these services do not qualify as gatekeepers, according to the Commission.

Furthermore, the Commission has initiated four market investigations to further evaluate Microsoft’s and Apple’s submissions, asserting that certain core platforms like Bing, Edge, Microsoft Advertising, and Apple’s i Message services may not qualify as gatekeepers.

An Apple spokesperson stated, “i Message is designed and marketed for personal consumer communications, and we look forward to explaining to the commission why i Message is outside the scope of the DMA.”

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