In the Land of Trillion Dollar Goliaths | EU approves DMA legislation that will regulate ‘gatekeepers’ like Apple, Google, Meta, Amazon and more
The European Union’s (EU) Digital Markets Act (DMA) that was originally proposed in December of 2020 have been formally adopted by the European Parliament with the goal to regulate gatekeeper companies like Apple, Google, Meta, Amazon and more.
Under the new rules, companies who are classified as ‘gatekeepers’ will be subject to the following:
- Allow users to install apps from third-party app stores and sideload directly from the internet.
- Allow developers to offer third-party payment systems in apps and promote offers outside the gatekeeper’s platforms.
- Allow developers to integrate their apps and digital services directly with those belonging to a gatekeeper. This includes making messaging, voice-calling, and video-calling services interoperable with third-party services upon request.
- Give developers access to any hardware feature, such as “near-field communication technology, secure elements and processors, authentication mechanisms, and the software used to control those technologies.”
- Ensure that all apps are uninstallable and give users the ability to unsubscribe from core platform services under similar conditions to subscription.
- Give users the option to change the default voice assistant to a third-party option.
- Share data and metrics with developers and competitors, including marketing and advertising performance data.
- Set up an independent “compliance function” group to monitor its compliance with EU legislation with an independent senior manager and sufficient authority, resources, and access to management.
- Inform the European Commission of their mergers and acquisitions.
The DMA will also limit gatekeepers from the following practices:
- Pre-install certain software applications and require users to use any important default software services such as web browsers.
- Require app developers to use certain services or frameworks, including browser engines, payment systems, and identity providers, to be listed in app stores.
- Give their own products, apps, or services preferential treatment or rank them higher than those of others.
- Reuse private data collected during a service for the purposes of another service.
- Establish unfair conditions for business users.
The DMA also has teeth, if gatekeepers ignore the rules, they could face fines up to 10 percent of the company’s total global annual turnover or 20 percent in the event of continued infringements. Additionally, gatekeepers could be subject to periodic penalties of up to 5 percent of the company’s global turnover. One thing is for sure, the next few years will be very interesting for consumers, with more market choice and the freedom to purchase and use the products people want.