‘Break them open’ new EU rules coming for Big Tech – TNW

As dry and bureaucratic as EU legislation may seem, it can also be groundbreaking and, dare we say it, radical. The bloc has taken a global lead in tackling regulation in areas such as green taxonomy and the much-anticipated AI Act. European lawmakers are also at the forefront in trying to curb the seemingly ever-growing dominance of Big Tech.

The Digital Markets Act (DMA) is the EUs tool to attempt to open the digital app marketplace up for smaller competitors. It sets criteria to identify the gatekeepers of the market and make them comply with a certain list of dos and donts.

Among other things, the DMA will promote interoperability, forcing companies like Google, Apple, and Meta to let users link rival apps to their services. This means that Apple will need to release the tightly controlled (and heavily commissioned) grip it exerts through its app store.

In the words of Cdric O, Frances then-digital economy minister, upon the signing of the act last year, Dont break them up, break them open.

Theoretically, it also means that users of different messaging apps will be able to contact each other from, say, WhatsApp to Telegram, but it is unclear how this would actually be implemented. It will also forbid the gatekeeper companies from doing things such as track their users outside core platforms for targeted marketing without consent.

While it entered into force on 1 November 2022, the DMA technically began applying yesterday, 2 May 2023. This means that potential gatekeeper tech companies now have until 3 July to notify their core platform services to the European Commission.

The Commission will then have 45 working days (until 6 September) to decide whether or not they pass the gatekeeper threshold. If the Commission concludes that the company in question does indeed meet the designated criteria, the gatekeeper will then have six months (until 6 March 2024) to comply with the requirements set out in the DMA.

In the case of non-compliance, the Commission can impose fines of up to 10% of the companys total worldwide annual turnover. In the event of repeated infringements this can increase to 20% plus periodic penalty payments of up to 5% of the companys total worldwide daily turnover.

So who are the gatekeepers? According to the DMA, they are platforms in the digital markets that have a significant impact on the internal market, serve as an important gateway for business users to reach their end users, and which enjoy, or will foreseeably enjoy, an entrenched and durable position.

As with all legal texts, the criteria go into significant detail. Simplified, they entail that companies will be considered gatekeepers if they have a market capitalisation of more than 75 billion, and 45 million monthly active users in the EU.

There are 10 platform services listed in the DMA. These are:

A company may be listed as a gatekeeper for more than one service.

Together with the Digital Services Act (DSA), the DMA forms one of the central columns of the EUs digital strategies. They are both part of a regulatory program known as A Europe Fit For the Digital Age.

Adopted three years ago, it is part of the Commissions ambition to make this Europes Digital Decade in which it will strengthen its digital sovereignty and set standards, rather than following those of others with a clear focus on data, technology, and infrastructure.

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'Break them open' new EU rules coming for Big Tech - TNW