German MEP, Andreas Schwab, rapporteur for the text, welcomed a “OK [qui] ushers in a new era of technology regulation worldwide.”and who can “[mettre] an end to the ever-increasing dominance of big tech companies”. EU Member States, the Commission and the European Parliament reached an agreement on Thursday 25 March on the Digital Markets Regulation (Digital Markets Actor DMA in English).
Franceinfo summarizes in three questions what you need to know about this new legislation, which should put an end to the abuse of a dominant position by digital giants by imposing a series of obligations and prohibitions on them.
What was the purpose of this text?
Google’s appeal after a fine of 2.4 billion euros, cancellation of a fine of more than 1 billion euros for Intel… After several years of chasing in vain after the infringements of multinationals in terms of competition in endless legal proceedings, Brussels has decided to act upstream, by imposing twenty rules on them to respect under penalty of dissuasive fines. Objective: to act quickly and effectively, before abusive behavior has destroyed competition.
The agreement reached on Thursday only targets the biggest platforms: Gafam (Google, Apple, Facebook, Amazon and Microsoft) and perhaps a handful of other groups such as the online booking company Booking or the social network TikTok. The list remains to be defined according to already established criteria of turnover, market capitalization and number of users.
The European Union is setting up “immediately applicable obligations, short and strict deadlines (to correct any faults) and dissuasive sanctions”, summarized the European Commissioner for the Internal Market, Thierry Breton, who presented this project in December 2020 with his counterpart in Competition, Margrethe Vestager. The entry into force of the text is expected in January 2023.
What does the agreement contain?
The legislation establishes Commission control over all takeovers of these giants, regardless of the size of the target, to limit the capture of innovation by start-ups and avoid takeovers with the sole purpose of killing a competitor.
It also lays down around twenty rules to stem the abuses observed in recent years. Thus, the major platforms will be prohibited from showing favoritism towards their own services in search engine results, as Google has been accused of doing with its online sales site Google Shopping.
The new law will prevent these giants from using the data generated on their site by client companies to better compete with them, as Amazon has been accused of.
The text will also better protect users by making their consent mandatory for the cross-referencing of data from several online services for advertising profiling purposes. It will prevent the imposition of pre-installed software on computers or phones, such as browsers or music applications, and facilitate the use of alternative products.
In the home stretch, the European Parliament has also obtained the addition of the interoperability of messaging services which will allow, for example, a Signal user to communicate with a contact using WhatsApp (Meta). Fines of up to 10% of global sales are provided for in the event of an infringement, and even 20% in the event of a repeat offense.
What were the reactions?
The French Secretary of State for Digital, Cédric O, was pleased to see the EU adopt “the most important economic regulation of recent decades”.
#DigitalMarketsAct adopted!
Today, the rules are changing for digital giants.
here’s why #PFUE2022 @EmmanuelMacron@Europe2022FR @ThierryBreton @vestager @Andreas_Schwab pic.twitter.com/MhDALfX70n— Cedric O (@cedric_o) March 24, 2022
On the side of the companies targeted, on the other hand, the reactions were less enthusiastic. In a reaction sent to AFP, the American group Apple said “concerned” by “some provisions (which) will create unnecessary privacy and security vulnerabilities for our users, while others will prohibit us from charging for the intellectual property in which we invest heavily”.
“While we support many of the DMA’s ambitions on consumer choice and interoperability, we remain concerned about the potential risks to innovation and the variety of choices offered to Europeans”, reacted a spokesperson for Google, who said he wanted to study the final text and cooperate with regulators for its implementation. Meta (parent company of Facebook, WhatsApp and Instagram in particular) and Amazon did not react.