New EU Law Targeting Messaging and App Marketplaces
Martech Outlook | Wednesday, November 23, 2022
New rules designed to rein in the dominance of big tech companies are coming into force in the EU.
FREMONT, CA:The Digital Markets Act (DMA) might compel digital behemoths like Google (NASDAQ: GOOGL) and Apple (NASDAQ: AAPL) to make their platforms and services available to other businesses and developers. For instance, messaging apps may be obliged to cooperate with less popular rival programmes. Due to Brexit, the law will not be applicable in the UK.
The act will alter the regulations in the European Union for influential and large businesses or gatekeeper firms. However, some of the bigger companies are worried about how the DMA would affect security and innovation.
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Smaller messaging applications will be able to ask the tech gatekeepers to grant their users access to the larger company's platform under the DMA. Large companies won't be compelled to instantly make more complex features compatible, though. According to the projections, it would take four years for audio and video calls between two individual users or groups of end users on several platforms.
Larger companies might also be required to let their customers select other app marketplaces.
Gerard de Graaf, an EU official, used the example of an iPhone user who should now be able to download apps not just from the App Store but from other app stores or the internet in his interview with the tech news website Wired. A video describing the act's intent was also made available by the European Commission. The act was hailed as a historic statute for the EU's digital transition by the BEUC, which is composed of various European consumer organisations.
It said that the new law would rebalance digital marketplaces, boost consumer choice, and end many of the worst practices big tech has engaged in over the years. It offered these two examples of the DMA's modifications:
Google might have to refrain from favouring its local, travel, or employment services over those of competitors in search results. Apple might be unable to compel customers to buy apps via its payment system. However, it emphasised that member states must provide the commission with the funding it needs to implement the new law.
The DMA will begin to apply on May 2, 2023, following a six-month implementation phase. The legislation's original proponent, Margrethe Vestager, the competition commissioner, stated: They urge all prospective gatekeepers, their competitors or consumer organisations, to come and talk to us about how to best implement the DMA.
The measure does not designate any specific gatekeepers, and the commission will decide which businesses belong under its purview by no later than September 6, 2023. However, it claims that gatekeepers will be businesses that meet standards for financial size and user count and possess an entrenched and permanent presence in the market.
Companies who violate the DMA could be fined up to ten per cent of their annual worldwide turnover for a first offence and up to 20 per cent for subsequent infractions.
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