March 25, 2022
Five things to know about the EU's landmark digital act
EU lawmakers and officials have agreed the main points of a landmark piece of legislation, known as the Digital Markets Act (DMA), that aims to loosen the grip held by Big Tech on life online.
Here are five rules included in the law that will force the likes of Google, Apple, Meta and Amazon to change their ways.
- Save the startups—Big tech companies make billions of dollars in profit every year and some of the windfall goes to scooping up start-ups and innovators.
This rankles authorities, who accuse the giants of using their war chests to snuff out potential rivals before they become a threat.
Under the new rules all buyouts, no matter how small, will have to be notified to the European Commission, the EU's executive arm based in Brussels.
- Messaging unity—After multiple scandals that hit Meta-owned Facebook, many users chose to swap the giant's Messenger or WhatsApp messaging services for alternatives, such as Signal or Telegram.
Yet the market power of Meta's services remains strong, making it difficult for WhatsApp dissenters to keep messaging links with family and friends.
To solve this, the DMA imposes interoperability between messaging apps, all while demanding that communications remain encrypted from user to user.
- Fair shopping on Amazon—Amazon is a major shopping platform for thousands of companies to sell their wares online. But suspicions are rife that the online giant abuses its role as a marketplace to better position its own products as a retailer.
The DMA will ban this conflict of interest, as well as demand that the gatekeepers share key information with business customers.
- Open the App Store—Around the world, Apple has strenuously defended the sanctity of its App Store, barring companies from using their own payment systems or being downloaded outside the Apple store.
Despite warnings that opening up iPhones would pose a security threat, the DMA will force Apple to allow software to be downloaded and for payments to be made outside its store.
Failure to comply could carry fines in the billions of dollars—big enough even for the world's biggest company by market value to pay attention.
- Ad transparency—Google's search engine and Meta's Facebook and Instagram are the world's biggest online advertisers, a status that critics say the companies abuse by accumulating valuable data about customers and keeping it to themselves.
The DMA will force the tech giants to reveal much more to advertisers and publishers on how their ads work and on an ad's actual effectiveness. This will make companies less beholden to Google or Facebook on understanding their customers and potentially encourage firms to get their message out in new ways.
© 2022 AFP