The European Union has unveiled sweeping measures to crack down on Big Tech and increase competition across the industry.
The EU has unveiled the Digital Markets Act (DMA), aimed specifically at “gatekeeper” companies, according to The Verge. Gatekeepers are companies with a market cap of at least $82 billion, at least 45,000 active users, and that run a “platform.” Such criteria would cover Amazon, Apple, Google, Meta, and Microsoft, but could also cover smaller companies and services as well.
Messaging, in particular, is a likely focus of the DMA, with the EU looking to force services like Facebook Messenger, iMessage, and WhatsApp to “open up and interoperate with smaller messaging platforms, if they so request.”
The DMA would include a number of other provisions, including stopping gatekeepers from preferring their own apps and services, as well as giving users the ability to uninstall default apps that come on their devices, and even choose which apps they want to use during install and setup.
Companies that sell or do business on a given platform would be entitled to access performance metrics from that platform. Similarly, companies that advertise on a platform would be given a way to independently confirm the performance of their advertising efforts.
The penalties for failure to comply would be severe, including up to 10% of a company’s annual worldwide revenue and periodic penalties up to 5% of its daily earnings. Most notably, the EU would also have the authority to enforce “behavioral and structural remedies.” This could including mandating that a company change how it operates its platform or service, and could even include forcing a company to spin off portions of its business, if the anti-competitive concerns cannot otherwise be addressed.
This is why, in the Digital Markets Act, there is a full toolbox where the sanctions become more and more severe,” the EU’s Commissioner for Competition, Margrethe Vestager told The Verge. “The fines will increase if you do not implement changes. Eventually, in the toolbox, there’s also the tool that you can actually break up a company if no change is happening, or if you are a repeat offender.”
The DMA represents the single largest effort by the EU to reign in the power and influence of Big Tech, combining a number of different efforts into one comprehensive piece of legislation. The legislation has not passed yet but, given the momentum that’s been building in the EU, it’s almost certainly going to pass sooner rather than later.
