‘Break them open’ – there will be new EU rules for Big Tech

However dry and bureaucratic EU legislation may seem, it can also be groundbreaking and, let’s put it that way, radical. The bloc has taken the global lead in tackling regulation in areas such as green taxonomy and the long-awaited AI law. European lawmakers are also at the forefront of trying to curb Big Tech’s apparent ever-growing dominance.

The Digital Markets Act (DMA) is the EU’s tool to try to open up the digital apps marketplace to smaller competitors. It sets criteria to identify the “gatekeepers” of the market and ensure they comply with a certain list of dos and don’ts.

Among other things, the DMA will promote interoperability, forcing companies like Google, Apple and Meta to let users connect rival apps to their services. This means that Apple will have to let go of the tightly controlled (and heavily taxed) grip it exerts over its app store.

In the words of Cédric O, the then French digital economy minister, at the signing of the law last year: “Don’t break them apart, break them open.”

Theoretically, it also means that users of different messaging apps can connect with each other, from the likes of WhatsApp to Telegram, but it’s unclear how this will be implemented concretely. It will also prohibit the gatekeeper companies from doing things like tracking their users outside of core targeted marketing platforms without consent.

While the DMA went into effect on November 1, 2022, technically the DMA became applicable yesterday, May 2, 2023. This means that potential gatekeeper technology companies now have until July 3rd to notify their core platform services to the European Commission.

The Commission then has 45 working days (until September 6) to decide whether or not they cross the gatekeeper threshold. If the Board concludes that the company in question does indeed meet the set criteria, the gatekeeper has six months (until March 6, 2024) to comply with the requirements of the DMA.

In case of non-compliance, the Commission can impose fines of up to 10% of the total worldwide annually marketing. In the case of repeated violations, this can amount to 20% plus penalty payments of up to 5% of the company total worldwide daily marketing.

Europe ‘strengthens digital sovereignty’

So who are the “gatekeepers?” According to the DMA, it is platforms in the digital markets that “have a significant impact on the internal market, serve as a major gateway for business users to reach their end-users, and enjoy, or are expected to enjoy, a deep-rooted and sustainable position.”

As with all legal texts, the criteria go to important details. Simplified, they mean that companies are considered gatekeepers if they have a market capitalization of more than €75 billion and 45 million monthly active users in the EU.

There are 10 platform services listed in the DMA. These are:

  • online intermediation services;
  • Online search engines;
  • online social networking services;
  • video sharing platform services;
  • number-independent interpersonal communication services;
  • operating systems;
  • cloud computing services;
  • advertising services;
  • web browsers;
  • Virtual assistants.

A company can be listed as a gatekeeper for more than one service.

Together with the Digital Services Act (DSA)the DMA is one of the central pillars of the EU’s digital strategies. They are both part of a regulatory program known as A Europe Fit For the Digital Age.

Adopted three years ago, it is part of the Commission’s ambition to make this Europe’s “digital decade” in which it will “strengthen its digital sovereignty and set standards, rather than follow others – with a clear focus on data, technology and infrastructure.”