Europe moves to clamp down on internet gatekeepers

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Tech

The EU bureaucracy has unveiled its latest initiative designed to curb the power of US internet giants, called the Digital Markets Act.

As ever with the EU, it has taken it ages to get to this point and this announcement still only concerns the provisional agreement of the text of the bill. Its core aim seems to be to bring US internet platforms to heel, in the name of protecting vulnerable European punters from their unbridled predations. To that end it will blacklist certain practices ascribed to perceived gatekeepers.

“The agreement ushers in a new era of tech regulation worldwide,” said German MEP Andreas Schwab, who seems to be the lead advocate for the DMA. “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 allow for fair competition on the internet. The new rules will help enforce that basic principle. Europe is thus ensuring more competition, more innovation and more choice for users.

“As the European Parliament, we have made sure that the DMA will deliver tangible results immediately: consumers will get the choice to use the core services of Big Tech companies such as browsers, search engines or messaging, and all that without losing control over their data. Above all, the law avoids any form of overregulation for small businesses. App developers will get completely new opportunities, small businesses will get more access to business-relevant data and the online advertising market will become fairer.”

Eurocrats define gatekeepers as companies that either have had an annual turnover of at least €7.5 billion within the EU in the past three years or have a market valuation of at least €75 billion They must also have at least 45 million monthly end users and at least 10,000 business users established in the EU. Here’s a summary of what the DMA means for them.

Gatekeepers will have to:

  • ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription
  • for the most important software (e.g. web browsers), not require this software by default upon installation of the operating system
  • ensure the interoperability of their instant messaging services’ basic functionalities
  • allow app developers fair access to the supplementary functionalities of smartphones (e.g. NFC chip)
  • give sellers access to their marketing or advertising performance data on the platform
  • inform the European Commission of their acquisitions and mergers

But they can no longer:

  • rank their own products or services higher than those of others (self-preferencing)
  • reuse private data collected during a service for the purposes of another service
  • establish unfair conditions for business users
  • pre-install certain software applications
  • require app developers to use certain services (e.g. payment systems or identity providers) in order to be listed in app stores

It feels like a lot of those rules were already in place but the EU is never afraid to duplicate bureaucracy just to make sure. Just as with the powers the UK government is giving Ofcom, the EU will be able to fine companies 10% of their annual turnover if they don’t comply but it has stopped short of threatening to lock up their execs if they don’t play ball.

The DMA is part of a global trend towards trying to get law and regulation up to speed with the digital domain. Companies like Google, Amazon and Apple are so many steps ahead of regulators it’s embarrassing. While we agree that they have had it too easy for too long it’s important not to throw the baby out with the bathwater by chucking counterproductive measures into the mix.

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