three questions about the European Union’s agreement to regulate the digital giants

Change in your smartphones (and not only). German MEP Andreas Schwab, rapporteur for the text, welcomed a “agreement [qui] ushers in a new era of technology regulation worldwide.”and who can put “an end to the ever-increasing dominance of large technology companies”† EU Member States, Commission and European Parliament reached an agreement on Thursday 25 March on the regulation of digital markets or DMA (the Digital Markets Actin English).

Franceinfo summarizes in three questions what you need to know about this new legislation, which aims to end the abuse of a dominant position by digital giants by imposing a series of obligations and bans on them.

What was the purpose of this text?

Google’s appeal after 2.4 billion euro fine cancellation of a ticket of more than a billion euros for Intel… After several years of unsuccessfully chasing the infringements of multinationals in competition matters in endless legal proceedings, Brussels decided to act upstream, imposing some twenty rules on them, which they punish to comply with dissuasive fines. Objective: act quickly and effectively before abuse destroys the competition.

The very large platforms play a role “access controller” of the internet, says the Commission. The agreement therefore focuses on Gafam (Google, Apple, Facebook, Amazon and Microsoft) and perhaps a handful of other groups such as the online booking company Booking or the social network TikTok. The list has yet to be defined based on criteria proving their strength: 75 billion euro market capitalization, 7.5 billion euro turnover in Europe and 45 million active end users and 10,000 business users. Brussels wanted to establish these objective criteria that apply to everyone, after it was accused of targeting only the American giants.

The European Union is established “immediately applicable obligations, short and strict deadlines (to rectify any deficiencies) and dissuasive sanctions”, European Commissioner for the Internal Market, Thierry Breton, summed up this project in December 2020 with his counterpart in Competition, Margrethe Vestager. The entry into force of the text is expected in January 2023.

What’s in the agreement?

The legislation provides that the Commission has control over all acquisitions of these giants, regardless of target size, in order to limit the takeover of innovation by start-ups and prevent acquisitions for the sole purpose of killing a competitor.

It also lays down about twenty rules to curb the abuses that have been identified in recent years. For example, the major platforms are prohibited from showing favoritism towards their own services in the search results of search engines, as Google is accused of doing with its online sales site Google Shopping.

The new law will prevent these giants from using the data generated by corporate customers on their site to better compete with them, as Amazon has been accused of.

The text should also better protect users by requiring their consent to cross-reference data from different online advertising profiling services. It prevents the imposition of pre-installed applications on computers or phones (weather, music, navigation apps) and facilitates the use of alternative products.

In the worst case scenario, the European Parliament also obtained the addition of the interoperability of messaging services, allowing a Signal user, for example, to communicate with a contact person via WhatsApp (Meta). Fines of up to 10% of worldwide sales are foreseen in the case of a violation, and even 20% in the case of repetition.

What were the reactions?

France’s Secretary of State for Digital, Cédric O, was pleased to see the EU’s approval “the most important economic regulation of recent decades”

Reactions from the target companies were less enthusiastic. In a response sent to AFP, the American group Apple said: “Worried” by means of “certain provisions” [qui] will create unnecessary privacy and security vulnerabilities for our users, while others will prohibit us from charging for the intellectual property in which we invest heavily”

“While we support many of the DMA’s consumer choice and interoperability ambitions, we remain concerned about the potential risks to innovation and the variety of choices offered to Europeans”, said a Google spokesperson, who said it would study the final text and work with regulators to implement it. Meta (parent company of Facebook, WhatsApp and Instagram in particular) and Amazon did not respond.