From today, Thursday 7 March 2024, the Digital Markets Act (DMA), the European regulation that aims to guarantee free access to the market and tries to keep the development of the internet under control. The long-awaited regulation was designed to rebalancing competition in digital markets, placing under the magnifying glass the business practices of large technology companies (Big Tech) that hold a dominant position in the sector.
The Digital Markets Act in fact applies to platforms with an annual turnover of at least 7,5 billion euros in the EU in the last three years, one market valuation exceeding 75 billion euros, at least 45 million end users monthly and 10 thousand corporate users established in the EU. There are essentially six large technology companies (called gatekeeper) affected by the changes: Alphabet (Google), Amazon, Apple, ByteDance (TikTok), Meta (Facebook, Instagram and WhatsApp) and Microsoft. Starting today, these companies will have to adapt to the new rules, under penalty of possible fines of up to 10% of their global turnover, which can double in the event of repeat offenses and non-compliance.
What is the Digital Markets Act and how it works
The Digital Markets Act defines the big ones online platforms such as “gatekeeper” if they control significant access between business users and consumers, giving them the power to act as private regulators in the digital economy. The DMA requires gatekeepers to separate some of their services and prepare new features and options that comply with European regulations. Alternatives must be available immediately and companies will have the opportunity to have them evaluated by the European authorities. The changes introduced by gatekeepers include new screens to update user preferences and new options for using services.
The Digital Markets Act was created to better regulate the dominant position of some of the main companies active on the Internet, in order to prevent abuses of dominant positions and the formation of monopolies.
The impact on Big Tech
The six gatekeepers will have to allow interoperability with third parties and not favor their own services to the detriment of competitors. Users will instead have more choice in terms of apps, search engines, browsers and payment systems. They will also have greater control over their personal data.
They are 22 platforms (operating in eight different sectors) identified by the European Commission and subject to the new rules: social networks (Tiktok, Facebook, Instagram, LinkedIn), intermediation services (Google Maps, Google Play, Google Shopping, Amazon Marketplace, App Store, Meta Marketplace), video sharing (Youtube), communication systems (WhatsApp and Messenger), the advertising sector (Google, Amazon, and Meta), operating systems (Google Android, iOS, Windows PC OS), search systems (Google Search) and programs navigation (Chrome and Safari).
We see the main new features introduced for now by each gatekeeper.
Apple opens access to alternative stores
Apple is one of the companies most affected by the Digital Markets Act (DMA), as it has always maintained rigorous control over its platform, better protecting the privacy of its users. Major new features for Apple include theaccess to alternative app stores to its official App Store (the so-called “side loading"), L'use of alternative payment systems and the ability for European users to select a default browser other than Safari. Just in recent days Apple has released an update (17.4) of iOS which introduces these new features.
The Apple company, however, warned that he will not eliminate his commission on developers despite access to alternative stores. European developers have three options: keep the commission up to 30%, reduce it to 17% with an additional tax for downloads over one million per year, or sell through a competing app store and still pay the download tax. Apple claims the plan complies with the law, but app makers protest, saying it violates both the letter and spirit of the law.
European regulators will decide on Apple's compliance with the DMA after it comes into force. If they launch a formal investigation, it could spark a lengthy legal battle that could force Apple to change its practices or face fines. The climate on these issues is already heated, with the Cupertino company having just been fined 1,8 billion euros by the European Commission for anti-competitive behavior in the music streaming market.
Alphabet (Google), no illicit advantage to its services
Also Alphabet, parent company of Google, is among the gatekeepers most affected by the new rules, being dominant in the European market for both online searches and Android. The services affected by the DMA include Google Play for apps and content on Android, Google Maps for maps, Google Shopping for online purchases, Google Search as a search engine, YouTube for video streaming, Android as an operating system, Alphabet's platforms for online advertising and Google Chrome as your main browser.
Google is the only search platform subject to DMA requests. This means that Google can no longer help unfairly its shopping services exploiting its dominant position, but must instead give priority to sites and portals that offer comparisons between different offers for a product, to ensure greater visibility for small and medium-sized businesses. In practice Google will make it its services are less visible in search results and will provide greater linking to competitor sites in specific categories such as flights and restaurants. With the new rules the Mountain View company has decided to delete Google Flights, its flight comparison service.
Alphabet then took steps to separate its services and foster greater competition in the digital environment. For example, it has updated Chrome to allow users to choose a search engine other than Google without presets. On Android, it has changed the browser choice options to allow other companies to compete fairly. Furthermore, it introduced options for avoid sharing data between services such as Google, YouTube and Google Play. Many then noticed the disappearance of direct links to other services from search results, such as Google Maps, to comply with regulations and ensure equal access to third-party map services.
Meta: interoperability in messaging
Meta, through its control of Facebook, Instagram and WhatsApp, holds a dominant position in several sectors, including that of online advertising and messaging.
Mark Zuckerberg's company recently introduced a paid subscription (9,99 euros on the web, 12,99 euros on smartphones) for those who wish to avoid advertising and limit user tracking. A choice criticized by many and on which the European Union has launched a formal investigation to verify its correctness. Additionally, Facebook and Instagram have stopped showing personalized ads to minors, eliminating criteria based on ethnicity, political opinions and sexual orientation. Instagram will also now allow users to opt out of seeing recommended content based on their personal data.
Meta users now have More options for managing data sharing among the different services offered by the company. Can separate your Facebook account from your Instagram account or Messenger, thus simplifying the management of privacy and personal data. Separating your accounts will have disadvantages: Separating your accounts means you will lose the ability to simultaneously publish posts or stories on Facebook and Instagram, and you will lose the ability to use Messenger to communicate with sellers in the Facebook Marketplace.
Mark Zuckerberg's company is then working to open its messaging platforms to interoperability with external services, allowing users to communicate between different apps maintaining encryption. The DMA requires messaging platforms to become interoperable, allowing users to send messages between rival platforms without compromising end-to-end encryption that protects message privacy. Affected by these new rules are Whatsapp e Messenger but not for example iMessage (Apple) which was excluded from the regulation. There is a big "but" about app interoperability: for users to take advantage of the new interoperability between messaging platforms, such as WhatsApp and Telegram, it is essential that other apps also accept these changes. However, it is not guaranteed that Telegram and other platforms will agree, as they are not subject to the regulations of the Digital Markets Act (DMA) as Meta is forced to do.
Microsoft facilitates the installation of alternative software to its own
Microsoft, subject to the DMA due to its operating system Windows, has made changes to comply with the rules. A has been introducedoption to uninstall Edge browser and disable the Bing search engine within the operating system. Widgets and other Windows features have also been decoupled to allow other online search providers, including Google, to take Bing's place.
Amazon can no longer favor only its own products
Amazon, the main online sales site in the European Union, is instead forced to modify some services to encourage competition. Two that must be change: Amazon's advertising platform and its marketplace. On the advertising side, the e-commerce company has introduced new options for sharing data between its services, allowing users to decide whether want to see personalized ads not only on amazon.com, but also on the company's other platforms, such as Twitch, Amazon Prime Video and electronic products such as Kindle and Fire TV. In the marketplace, Amazon can no longer favor its products compared to those of third-party sellers and must provide detailed reports on advertising rates and the effectiveness of advertising campaigns.
ByteDance (TikTok): data transfer simplified
ByteDance, the company behind TikTok, made rappeal against his designation as gatekeeper, but in the meantime it must still adapt to complying with the DMA. He introduced tools for simplify data transfer of European users to other platforms. TikTok has then stopped showing personalized advertising to minors and allows users to choose not to see recommended content based on their personal data.
