The European Union (EU) has set its sights on major tech companies, including Apple, Amazon, Microsoft, Alphabet, Meta, and ByteDance. These tech giants have been categorized as online “gatekeepers”. However, they will face the most rigorous scrutiny under the EU’s newly established Digital Markets Act.
The Digital Markets Act represents a comprehensive set of regulations designed to curb the market dominance of online corporations. Al though, it includes a list of rules and guidelines aimed at preventing tech giants from monopolizing emerging digital markets. Meanwhile, violators could face substantial fines or even the potential for the breakup of their companies.
This development is part of a broader overhaul of the EU’s digital framework. It has begun taking effect this year. It follows closely behind a companion set of rules known as the Digital Services Act. Moreover, it is geared towards enhancing internet user safety.
Thierry Breton, the European Commissioner responsible for digital policy within the EU, emphasized the need to challenge the notion. That certain online platforms are “too big to care.” He stated, “It’s time to turn the tables and ensure that no online platform behaves as if it was ‘too big to care.'”
According to the EU’s Executive Commission, digital platforms can be classified as gatekeepers if they serve as critical intermediaries between businesses and consumers by providing essential platform services. Besides, this category includes services such as Google’s Chrome browser, and Microsoft’s Windows operating system. In addition to, Meta’s WhatsApp messaging app, TikTok’s social network, and intermediary services like Amazon’s Marketplace and Apple’s App Store.
The designated companies now have a six-month window to begin complying with the requirements set forth in the Digital Markets Act. Whereas, these requirements are expected to bring about significant changes in how major tech companies operate.
Some key provisions of the Digital Markets Act include:
- Interoperability for Messaging Services: Messaging services will be required to collaborate with each other. Enabling users of different platforms to exchange texts or video files seamlessly.
- Fair Search Results: Platforms are prohibited from prioritizing their own products or services over those of their competitors in search results. This prevents companies like Amazon from favouring their own-brand products over third-party offerings.
- Data Privacy: Online services are prohibited from amalgamating a user’s personal data to create targeted advertising profiles. Even without explicit consent.
Above all, violations of these regulations could result in fines of up to 10% of a company’s annual global revenue. Moreover, repeat offenders face penalties of up to 20% or even the possibility of a corporate breakup.
This EU crackdown on tech giants reflects the growing global efforts to address concerns about the influence and market power of these major players in the digital landscape.