EU’s Digital Markets Act Takes Aim at Big Tech Companies
The fundamental principles of online and mobile business will be completely transformed by new regulations introduced by the European Union. This will disrupt the revenue models of major technology companies and alter the way consumers engage with these services.
The Digital Markets Act (DMA) is one of the world’s strictest pieces of legislation, targeting the market position of the world’s top technology companies and aiming to make it easier for people to move between competing services – such as social media platforms, internet browsers and apps. in stores.
On Wednesday, the EU Commission named the services of the 22 largest technology companies as “gatekeepers” of online services.
This means they need to make their messaging apps work with their competitors and let users decide which apps to pre-install on their devices.
Companies include Alphabet, Amazon, Apple, Meta, Microsoft and TikTok owner ByteDance. They have six months to comply.
This is how the new rules can affect each service:
ADVERTISING:
According to the DMA, gatekeeper services must now obtain express consent before tracking a user for advertising.
Business customers using Amazon, Google and Meta’s online advertising services are also empowered to request collected data related to their campaigns, a valuable resource often hidden from business customers.
APP STORES:
Apple and Google are forced to provide space for third-party app stores on their iOS and Android devices.
Currently, Android users can install apps from alternative sources. This process is known as “sideloading”, but this often requires them to disable certain security settings. Apple has warned against sideloading for security reasons.
Industry experts have predicted an avalanche of alternative app stores after the new rules come into effect, with the possibility of exclusive deals meaning certain games and apps can only be downloaded from select stores.
Ben Wood, chief market officer at industry analyst CCS Insight, previously told Reuters that smaller startups as well as giants such as Amazon and Microsoft may try to attract consumers and developers to their own app stores.
DEFAULT APP:
As with app stores, consumers are no longer encouraged to use other default apps on their devices, such as Safari on an iPhone or Google Maps on an Android phone.
Gatekeepers must allow users to more easily navigate from the device’s default app store, web browser, navigation tool, and more to options of their choice. For example, they can provide users with a “choice screen” with several options when setting up their device.
ELECTRONIC SHOPPING, SEARCH ENGINES AND SOCIAL MEDIA:
Services such as Amazon’s marketplace, Facebook’s content feed, and Google’s search engine are prohibited from prioritizing their own services and products over alternatives when users scroll their screens.
This comes as e-commerce giant Amazon has come under global scrutiny over claims it had prioritized its own products over third-party sellers using its platform.
MESSAGES:
According to DMA’s new interoperability rules, gatekeepers’ communication applications are no longer excluded from others.
So far, the EU has only designated Meta’s Facebook Messenger and Whatsapp services. Once DMA goes live, users will be able to instantly send messages through other apps like Signal or Telegram from these platforms.
The authorities are currently investigating whether Apple’s iMessage service should be added to the list.
Such a move would be a major upheaval for the tech giant, which has designed an entire ecosystem of products — iPhones, iPads, Macs and more — based on how well they work together.
