On Thursday, the European Union announced new antitrust legislation to balance competition on the internet platform, mainly targeting the US Big Tech.
The Digital Markets Act (DMA) aims to rein in the power of the largest technology corporations. This ruling would allow smaller entities to compete with the heavyweight firms.
The regulation will introduce sweeping reforms that will address systemic issues in the whole market.
In line with this, Big Tech companies have to change their core business practices in the region.
The DMA could force new obligations on gatekeepers, firms that could control data and platform access.
These include sites with a market capitalization of at least $82.00 billion and a minimum of 45,000 active users.
Subsequently, this classification includes well-known companies like Google, Microsoft, Meta, Amazon, and Apple. At the same time, this will encompass smaller entities like Booking.com.
Then, the initial announcement single outs interoperability of messaging apps like WhatsApp, Facebook Messenger, and iMessage.
The EU mentioned that these platforms should give users more choice in sending messages. Consequently, it said that people should not worry about what platform the recipient is on.
The association also stated a requirement that users should be able to choose their browser and virtual assistants freely.
The rules prohibit the Big Tech companies from favoring their own services over rivals’. In addition, this act would allow users from removing pre-installed software or apps.
The non-compliance with the legislation would trigger steep financial penalties. For example, the European Commission could impose fines of up to 10.00% of a firm’s total worldwide turnover.
Eventually, it could charge 20.00% in case of repeated offences. Moreover, in case of systematic violation, the Commission may ban the business from acquiring other firms for a specific time.
EU rules on Big Tech could set global standard
Experts noted that the latest EU rules against the Big Tech could set a global standard. Governments worldwide currently take a tough stance on abuses of market power in the sector.
However, the tough legislation may even force the tech giants to be more innovative.
Analysts noted that the DMA might even boost some companies’ business models. They explained the rules might trigger more increased prices and vertical integration into hardware.
Meanwhile, the DMA has been in the works for years. But, then it has attracted plenty of criticism from Big Tech companies.
For instance, Apple and Google reiterated their worries about the legislation. They said that the act could create unnecessary privacy and security vulnerabilities for users.
Several American lawmakers also denounced the act as it unfairly targets American workers.