EU strikes deal on ambitious big tech regulation

The Member States of the European Union (EU), the Commission and the European Parliament reached this Thursday (24) an agreement that paves the way for the adoption of ambitious legislation to regulate the activity of digital giants.

After several months of negotiations, the European institutions reached a compromise on the Digital Markets Act, which aims to impose on Google, Apple, Meta (the parent company of Facebook), Amazon and Microsoft, known by the acronym “Gafam “, a series of obligations and prohibitions to repress anti-competitive practices.

The agreement reached “marks the beginning of a new era of technology regulation around the world”, said German MEP Andreas Schwab, who headed the negotiations for the European Parliament.

“The law on digital markets puts an end to the increasing domination of big tech companies,” he added.

For the French Secretary of State for Digital Affairs, Cédric O, it is the “most important economic regulation of these last decades”.

Considered historic, the regulation, whose entry into force is scheduled for January 2023, would be a turning point in the fight against the abuse of large digital platforms. And it could set a precedent for similar legislation in other parts of the world.

The text, which sets out dozens of rules under penalty of dissuasive fines, is aimed at the largest platforms: the “Gafam” and other groups, such as the online booking site Booking and the social network TikTok.

“There will be profound consequences” for the activities of these companies, estimates Katrin Schallenberg of the law firm Clifford Chance.

Apple ‘worried’

In a reaction sent to AFP, the American Apple said it was “concerned” about “some provisions that will create useless vulnerabilities in terms of confidentiality and security for our users, while others will prohibit us from paying for the intellectual property in which we invest a lot”.

The law implements the possibility for the user to choose between several app stores, which would allow the App Store, Apple’s, to be avoided, one of the points criticized by the Commission.

The regulation establishes a control by the European Commission on all the purchase operations of these giants, in order to limit the accumulation of innovations by emerging companies and prevent acquisitions with the sole objective of ending competition.

It also includes rules to contain the abuses found in recent years and, in case of infringement, provides for fines that can range from 10% of the group’s worldwide sales to up to 20% in case of recurrence.

Any favoritism with their own services in search engine results will be prohibited for major platforms, as Google has been accused of doing with Google Shopping.

The new law will also prevent tech giants from using data generated on their platforms by client companies.

In addition, the text seeks to better protect users, by making their consent mandatory for the use of their data originated in the online services.

It will also prohibit the imposition of pre-installed programs on computers and mobile phones, such as browsers or music applications, and facilitate access to alternative products.