Last July, the European Parliament approved the Digital Services Act , which came into force on November 1st in the region. The vote resulted in 539 votes in favor, 54 against, and 30 abstentions . It marked the culmination of a multi-year project that encountered several obstacles along the way.
The legislation aims to establish new rules for large technology companies, both domestic and foreign, and to regulate the provision of services so that these companies comply with their economic and legal obligations. Parliamentarians hope that its implementation will protect citizens and limit the monopolies that some multinational brands often create.
The new EU Digital Markets Act comes into force today.
Although Tuesday was the date set by parliament for the law to come into effect, its implementation will not begin until next May, as a six-month grace period has been established to allow for adjustments for all involved. One of the main objectives is to promote healthy competition among all technology companies and expand the opportunities offered by the digital economy.
Digital Markets Act: Rules come into force for digital access gatekeepers to ensure open markets
Questions and answers: Digital Markets Act: ensuring fair and open digital markets* https://t.co/bMdx0BfAVR— EUROPEDIRECTCANARIAS (@EUROPEDIRECTLSP) November 1, 2022
One aspect that many portals highlight is the express prohibition that platforms will have from crossing data between networks that are part of their ecosystem or with other external ones.
In other words, Facebook will not be able to share registration information and other private documents with WhatsApp unless there is prior approval from users, which they will surely include at some point in their terms of service.
On the other hand, fines are established for those who fail to comply with the objectives of the law, ranging from 10% to 20% of their business. In case of repeated offenses, it will lead to an investigation by the relevant authorities.
This will apply - for example - if unfair conditions are created in service contracts, if their products are favored over others on e-commerce platforms, or if users are not guaranteed that they can remove any unwanted application.
Of course, the major tech companies have opposed this measure and in some cases expressed concern about the limitations it will impose on innovation or revenue generation. All social media companies, digital services providers, and similar businesses must comply with the terms of the law or face being barred from operating in the region or being fined substantial sums of money.
How will this law affect the monopoly of Amazon, Google, Apple, and other tech giants?
Although the law that has just come into effect in Europe will affect large technology platforms, one of the established parameters relates to antitrust regulations, which aim to put an end to unfair competitive practices. The installation of pre-installed brand applications that hinder the growth of new developers is prohibited.
Another new feature that hasn't been well-received is the interoperability between messaging systems. This means that any company will be able to communicate with WhatsApp, regardless of whether it's owned by Meta.
It won't be easy to achieve from a technical standpoint, but it's a project that digital companies must work on. One researcher pointed out that they will all have to make significant changes to their codebases.
One of the things that will particularly affect Apple is the access to third-party app stores that they must provide on their devices . This option gives the public freedom to select tools from unknown sources if they deem it appropriate. It's worth remembering that Google also has its own system for Android. This will surely spark a major debate that will likely end up in court.
In addition, individual developers or companies that sell applications will be able to use the payment method they prefer , without being forced to use a specific one.
This gives users the freedom to choose as they see fit, although it limits the partnerships that platforms have , which are often a source of additional income for each coupon given.
Similarly, there is a specific category that includes companies like Meta, Amazon, Google, Microsoft, and Apple. These are the "gatekeepers ," a term that refers to those operating in at least three countries and generating millions of euros in revenue.
It is estimated that, in many cases, they abuse their power by limiting the options of those who buy a device they produce or use their online services . They must comply with regulations from this point forward, so their monopolistic practices will soon be reduced.
On November 1st, the new European Union Digital Markets Act (DMA) comes into effect, which will change the internet forever. It means the end of monopolies and privileges for companies like Apple, Google, Microsoft, and Meta.
— Manel Torres Estrada (@maneltorresestr) November 2, 2022
The specifications outline who qualifies as access guardians. These include app stores, instant messaging services, operating systems, search engines, virtual assistants, advertising services, video platforms, social networks, browsers, and cloud-related software. They will all have the next six months to begin configuring their features and adapting to the legislation.
According to Ivan Bartos, Vice President of the Government for Digitalization , from this moment on they will be able to ensure that large platforms comply with the law and guarantee new opportunities for small businesses.
But that's not how the giants see it, because they think it puts the provision of the service at risk and limits the ability to provide quality options to those who buy a product because they like it, it suits them or they think it is the best, even though there are others on the market.
