The European Union plans to more effectively regulate large technology companies operating within its territory. EU member states have reached an agreement to pass the Digital Markets Act. It must now be approved by the Parliament and the Council, where it is expected to be passed soon, and could come into force by the end of this year or early 2023.
With this law in effect, the EU will identify " gatekeepers . " These are companies that hold a privileged market position and use that position to eliminate competition. They will be companies with at least €7.500 billion in revenue in the EU, a market capitalization of €75.000 billion, 45 million monthly users, or 10.000 professional users. These companies will be responsible for enforcing the law to ensure free competition, innovation, and prevent the abuse of their market position.
The European Union wants to control the monopolies of the big technology companies
One of the key principles of the law is that it guarantees the right to uninstall pre-installed software and choose what you want to use. This means that when you buy a new device, you can choose which services you want to use during the initial setup, without being forced to install anything by default. Third-party applications, including digital stores, can be installed. This will make it possible to install the Google Play Store on an Apple device or the Apple App Store on an Android device.
Large companies will no longer be able to cross-reference user data from their various products without user consent . This comes after years of Meta combining Facebook and WhatsApp user data to deliver personalized advertising. Meta even forced users to accept these terms if they didn't want to lose access to WhatsApp . Companies will also be prohibited from using their platforms to prioritize their products. This means that Apple Stores will no longer allow payments through payment methods other than Apple's own, and Google Shopping will no longer appear as the top search results on Google.
Large fines for companies that violate the Digital Markets Law
The European Union's Digital Markets Law expects there to be interoperability between messaging apps, which would allow Telegram users to communicate with WhatsApp users. But this will be a complicated step and it looks like a roadmap rather than something immediate.
Companies that buy ads on a platform will have the right to be provided with the necessary tools to measure the reach of their advertising. They will also have the right to the data they generate on the big platforms.
Fines can be as high as 10% of global revenue , not profits, and can be increased to 20% for repeat offenses. In cases of systematic non-compliance, companies would be prohibited from acquiring other businesses or being forced to participate in compliance with this law.
