Tech giants such as Facebook and Google will have to comply with much stricter rules in the European Union in the future. Negotiators from EU member states and the European Parliament reached a provisional agreement in Brussels on a law intended to curtail the power of those companies and ensure fairer competition.
France, currently president of the EU, confirmed that an agreement had been reached after eight hours of meetings. By the Digital Markets Act (DMA) should give consumers more choice between providers of online services. The rules could go into effect on January 1 next year, but tech companies have asked for more time to prepare for the changes.
“The DMA tackles abuses in the digital single market”, the German MEP René Repasi summarized the new European law. He speaks of a game changer. “It will end harmful business practices such as personalized advertising.”
Dividing companies
The law should allow sanctions against the tech giants, such as dividing companies and a ban on takeovers. Companies that violate the rules can also be fined up to 20 percent of their worldwide annual turnover. Companies such as Alphabet (Google’s parent company), Amazon, Apple, Meta (Facebook, Instagram and Whatsapp) and Microsoft may have to adapt their way of working in the EU as a result of the DMA.
Under the new law, business users should be given more freedoms. The European rules also ensure that the tech giants are no longer allowed to favor their own services over those of a rival. Nor should they stop users from uninstalling pre-installed software or apps.
Apple disappointed
Due to the stricter legislation, Apple should open its App Store to alternative payment options. Google will have to offer users of Android smartphones clearer alternatives to its search engine, Google Maps and the Chrome browser. For Apple’s iPhone, users should be able to uninstall the Safari browser and some other Apple apps. That’s not possible now.
The new law applies to companies with a market capitalization of at least 75 billion euros, an annual turnover of 7.5 billion euros and at least 45 million users per month.
In a statement, Apple said it was disappointed with the European law. The company says it is concerned that the terms in the DMA pose privacy and security risks.
