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In the Land of Trillion Dollar Goliaths | Proposed EU legislation seeks to open up ‘core platform services’

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Today the EU dealt the Trillion Dollar Goliaths with a massive blow to their anti-competitive practices on the whole with today’s announcement targeting the messaging apps marketplace. Called the Digital Markets Act (DMA), the EU crafted the legislation to transfer power from the Big Tech platforms to their smaller competitors.

Messaging apps like iMessage, WhatsApp, Facebook Messenger will need to interoperate with each other and smaller messaging platforms. The intent is to give users more choice in ow they send messages regardless of which messaging app the recipient is on. Additionally, the DMA includes a requirement to “freely choose their browser, virtual assistants or search engines.”

As good as all of that sounds, the legislation has not yet passed and some of the language could still change. Expected to pass in October, the DMA would force new rules on companies that are deemed to be “gatekeepers,” which defined in the legislation as a firm with a market cap of at least $82 billion, at least 45 million monthly users and are an app “platform” or social network.

“the Commission can impose fines of up to 10 percent of its total worldwide turnover in the preceding financial year, and 20 percent in case of repeated infringements”

Deal on Digital Markets Act: EU rules to ensure fair competition and more choice for users

Does the legislation have teeth?

What if a “gatekeeper” violates the rules? The DMA says “the Commission can impose fines of up to 10 percent of its total worldwide turnover in the preceding financial year, and 20 percent in case of repeated infringements. In case of systematic infringements, the Commission may ban them from acquiring other companies for a certain time.”

The DMA is broad in scope overall and intended to enable many future antitrust tools, but also contains a number of specific demands for tech companies, like:

  • Interoperability. Gatekeepers should allow their platforms to work with similar services from smaller third-parties. Exactly how this will be interpreted isn’t yet clear, but it could mean letting users on large messaging platforms like WhatsApp contact users on other, platforms.
  • The right to uninstall. Consumers are to be given more choice over software and services, particularly in mobile operating systems like iOS and Android. They should be able to uninstall any preloaded software, and be giving a choice when setting up a new device what service they want to use for applications like email and web browsing.
  • Data access. Businesses should be able to access data they generate for larger platforms. This would mean, for example, letting companies who sell goods on platforms like Amazon access Amazon’s analytics about their performance.
  • Advertising transparency. If a company buys adverts on Facebook, for example, they should be given the tools to independently verify the reach of their ads. Companies will also be barred from “combining personal data for targeted advertising” without explicit consent.
  • An end to self-preferencing. Companies can’t use their platforms to put their products first. This means Google, for example, can’t put its shopping service at the top of its search results unless there is some sort of competitive tender for that spot.
  • App store requirements. The commission says platform owners can no longer require app developers to “use certain services (e.g. payment systems or identity providers) in order to be listed in app stores.”
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