March 28, 2022

Europe’s Digital Markets Act set to curb Big Tech

March 28, 2022

Europe’s Digital Markets Act set to curb Big Tech

March 28, 2022

The DMA (Digital Markets Act) is expected to be operational by the end of 2022 and signifies the end of a monopoly for some of the biggest tech firms.

With non-compliance engendering a fine of up to 20% of global turnover, it will obligate companies such as Meta, Google and Apple to accommodate the provision of rival products on their own platforms.

WhatsApp could be compelled to allow people to use its app to exchange messages with others using rival messaging apps whilst Apple, as another example, might be forced to allow users to download apps from rival app stores.

Although this new law still faces the final vote in the Eurpoean Parliament and between representatives of the European Union’s 27 member states, its endorsement is considered a formality.

Margrethe Vestager, Executive Vice President of the European Commission for A Europe Fit for the Digital Age, announced that she expects the DMA to be in force from October. From that date, big tech companies will be expected to prove that they are no longer hampering their competition.

As a consequence, Europeans will no longer be restricted to using a big tech platform simply because it is the most popular and the only place they can find most of their friends or business associates.

MEP Paul Tang compares the situation with the operation of domestic telephone networks in that most people make calls without even considering which network the person they are calling is using.

He said: “This should be a common exchange. It’s not just because Threema or Signal do not want it, it’s also the convenience of the user.”

Whilst the new DMA is considered a step in the right direction, Andy Yen, founder of Proton Mail, thinks that the EU could have gone much further. He is a proponent of “choice screens”, wherein users are given a list of email providers when they are setting up a new device, stating:

“Based on what has been made public so far, it appears that choice screens will only be implemented for a very limited range of services, but we will have to wait for the final text to know for sure,”

Frank Karlitschek, CEO and founder of Nextcloud, stated:

“We think [the DMA] is not strong enough to stop the anticompetitive behavior of the tech giants.”

Rich Stables, CEO of the Kelkoo Group, limited himself to describing the DMA as only “potentially transformative”.

Adding to the negativity, lobbyists working on behalf of Apple, Google, Facebook, Microsoft and Amazon have held no less than 48 meetings with officials in the European Parliament and the European Commission since December 2019. This is considered a conservative estimate because not all meetings are published.

Despite this disappointment, there have been indications that the new legislation has begun to take effect already; Google has allowed Spotify to test its own payment system in Google’s Android app, for example.

As with any new, expansive legislation aimed at a huge, well-established, complicated and ever-evolving industry, we cannot expect a silver bullet or instant panacea for the monopolies which are presided over by big tech.

What we can expect is a big step in the right direction!

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