In a landmark move aimed at curbing the influence of tech giants in the digital landscape, the European Union (EU) has set its sights on Apple, Amazon, Microsoft, Alphabet, Meta, and ByteDance. These industry behemoths have come under the EU’s regulatory spotlight as the union enforces its Digital Markets Act, ushering in a new era of oversight and accountability for online companies.
The EU’s Digital Markets Act outlines a comprehensive list of “do’s and don’ts” applicable to six tech industry titans now dubbed as “online gatekeepers.” These regulations compel tech giants to adhere to stringent guidelines under the threat of substantial fines or even the prospect of breaking up their operations if they fail to meet the EU’s requirements.
Central to the Digital Markets Act’s objectives is the prevention of tech giants from monopolizing online markets, particularly in the realm of core platform services. These services include Google’s Chrome, Microsoft’s Windows, Meta’s WhatsApp, ByteDance’s TikTok, Amazon’s Marketplace, and Apple’s App Store, among others. The Act also addresses middleman roles that these companies play in the digital ecosystem.
European Commissioner Thierry Breton emphasized that these measures are designed to foster more choice for consumers, reduce barriers for smaller competitors, and “open the gates to the Internet.”
Under the newly enacted law, tech companies must refrain from locking-in customers or obstructing users from engaging with businesses outside their respective platforms. Notably, Apple has already started to ease its long-standing restrictions in response to objections raised by Epic Games and Spotify, who had voiced concerns about Apple Pay fees and subscription limitations.
Additionally, messaging services such as Telegram, Signal, and WhatsApp can now be interoperable, ending their segmentation. The Act also prohibits platforms from prioritizing their own content over that of external providers, a practice that had been observed, for example, in Amazon’s use of the “buy box” system.
Furthermore, the Act mandates that essential software and apps can no longer be installed by default, ending practices like Google bundling Chrome with Android phones.
Companies failing to comply with these stringent regulations may face fines of up to 10% of their global revenue, with repeat offenders liable for penalties of up to 20% or even the dissolution of their business.
The response from the tech giants to the EU’s move has been mixed. Meta and Amazon have welcomed the decision, while TikTok has expressed its disagreement, arguing that the app has introduced more choice into an industry already populated by numerous incumbents.
The EU’s Digital Markets Act aligns with the broader objective of providing consumers with increased options and fostering competition among the tech giants that have become increasingly powerful. It forms part of a comprehensive digital rulebook alongside the recently enacted Digital Services Act, both aimed at enhancing the safety and service quality for internet users in Europe.
As the Digital Markets Act takes effect, Big Tech is already adapting its operations to comply with the stringent EU regulations. One thing is abundantly clear: when it comes to playing by the EU’s rules, no tech giant is too big to evade scrutiny and accountability.
