The European Union has agreed to new digital legislation aimed at reining in web “gatekeepers” like Google and Facebook’s parent firm, Meta.
Late Thursday, EU officials reached an agreement on the text of the bloc’s Digital Markets Act, which is part of a long-awaited overhaul of digital rules with significant ramifications for the global tech sector. The measure, which still need other approvals, aims to prevent the largest internet companies from dominating digital markets by threatening fines or even a business breakup.
The act defines “gatekeepers” as enterprises having a market value of at least €75 billion ($82 billion), at least 45 million monthly users, and a “platform” such as an app or social network. This includes well-known companies such as Google, Microsoft, Meta, Amazon, and Apple, as well as smaller companies such as Booking.com.
It addresses worries about apps becoming siloed, forcing messaging services or social media platforms to “open up and interoperate with smaller messaging platforms.” The use of people’s data for targeted internet adverts, which is a major source of revenue for corporations like Google and Facebook, would also be restricted.
The new laws show how Europe has been a global leader in efforts to limit tech giants’ dominance through an onslaught of antitrust investigations, stringent data privacy regulations, and planned rules in areas such as artificial intelligence.
“What we have been deciding about yesterday will start a new era in tech regulation,” Andreas Schwab, a European Union legislator, said during a press conference on Friday.
The European Consumer Organization, or BEUC, applauded the agreement, claiming that it would benefit consumers by fostering more equitable and competitive digital markets.
Companies in the technology sector were less enthusiastic.
Parts of the Digital Markets Act, according to Apple, “will create unnecessary privacy and security vulnerabilities for our users while others will prohibit us from charging for intellectual property in which we invest a great deal.”
Google stated that it will review the language and cooperate with regulators to put it into effect. “While we support many of the DMA’s ambitions around consumer choice and interoperability, we remain concerned that some of the rules could reduce innovation and the choice available to Europeans,” the business stated.
Amazon said it was looking at the implications of the rules for its consumers. A request for response from Facebook was not returned.
The bill includes a number of eye-catching provisions that have the potential to change the way giant internet corporations operate.
Companies would not be able to rank their own products or services higher in internet search results than those of others, nor would they be allowed to reuse data obtained from various providers.
Unless “explicit consent” is given, a user’s personal data cannot be merged for targeted marketing.
To avoid the dominance of a few companies that have already created large user networks, messaging services and social media platforms must collaborate. Users of Telegram or Signal, for example, may be able to send messages to WhatsApp users as a result of this.
Violations might result in hefty fines of up to 10% of a company’s yearly revenue. For a second infringement, a punishment of up to 20% of the company’s global turnover may be applied. For affluent Silicon Valley firms, this might amount to billions of dollars.
After months of negotiations, negotiators from the European Parliament and the Council, which represents the 27 EU member countries, struck an agreement. It must now be approved by the European Council and the European Parliament.