EU set on new rules to muzzle the tech giants

EU set on new rules to muzzle the tech giants
Smartphone users. Credit: Unsplash

European Union lawmakers agreed on Thursday evening to new EU rules aimed at reigning in the power of tech giants.

The move heralds a shift in the digital landscape in what has up till now been "the wild west" with a lack of rules to govern platforms. The Digital Markets Act (DMA) will focus on large platforms in the digital sphere which act as "gatekeepers," creating unfair practices to smaller companies wishing to enter the market.

"The agreement ushers in a new era of tech regulation worldwide," said EU parliament negotiator Andreas Shwabb. "From now on, they (tech companies) must show that they also allow for fair competition on the internet. The new rules will help enforce that basic principle. Europe is thus ensuring more competition, more innovation and more choice for users."

The policy is one of two building blocks that will form the EU's digital single market. The other building block, the Digital Services Act (DSA) will hone in on disinformation, while the DMA focuses on regulating platforms.

What the new rules mean in practice

The landmark ruling will focus on the biggest platforms, those with an annual turnover of 7.5 billion. To even be a gatekeeper, platforms need to have browsers or social media which have at least 45 million monthly users in the EU.

EU legislators agreed that the largest messaging services, including WhatsApp, Facebook Messenger or iMessage, will be required  interoperate with smaller platforms, if they want. Users of small or big platforms will be able to message, send files or video call across messaging apps, giving them more choice. The targeting of personal data by platforms will only by allowed with explicit consent to the gatekeeper.

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The goal is to balance the market, which has been skewed by the dominant positions of the biggest players. The DMA gives the European Commission greater control over takeovers of digital companies, aimed at preventing the monopolization of the European tech market. The rules will prevent pre-installed software of laptops or phones, such as browsers and music apps.

If the gatekeeper doesn't follow the rules, the Commission can fine the company with up to 10% of its global turnover the year before, and 20% in the case of repeated violations.

Why is this important

The explosion of the internet has meant that people use platforms for knowledge and to connect with others, among other things. The rules governing the internet are therefore crucial, yet the only legislation the EU has had up till now was the e-commerce legislation from 2000, which did little to regulate platforms out of fears of stifling the internet when it was still young.

The lack of clear guidelines has lead to malpractice. The DSA will target how the tech giants should deal with disinformation and cyber harassment of users, while the DMA focuses on companies and how to ensure fair competition rules and create more choice for users.

What's next

The Commission will be tasked to enforce the rules, which come into effect later this year. The adoption of the legislation is a big win for French presidential candidate Emmanuel Macron during an election year, who can put a feather in his cap while France has the rotating European Council presidency. The regulation has been agreed upon after just 15 months – turbo speed for often sluggish institutions. It is expected that Macron will make a push to ensure the DSA will be finalised while France holds the Council presidency.

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