A clutch of big tech firms, including Amazon.com Inc., Apple Inc., and Alphabet Inc.’s Google, have officially notified the European Union (EU) of their compliance with the bloc’s landmark digital antitrust rules. This development has the potential to significantly impact the operations of these industry giants within the EU.
A new era of regulation
Under the Digital Markets Act (DMA) that came into force last November, companies with more than 45 million monthly active users and a market capitalization of €75 billion are considered gatekeepers, providing core platform services. In line with this classification, the tech giants, including Meta Platforms Inc., Microsoft Corp., Samsung Electronics Co., and Bytedance, have notified the EU of their qualification as gatekeepers under the new EU tech rules.
Once designated as gatekeeper platforms, the European Commission will review and confirm the specific services provided by each company, determining whether they fall under the scope of the regulations. These core platform services must have more than 45 million monthly active end-users and over 10,000 active business users within the EU yearly.
Balancing innovation and user protection
The obligations under the EU’s digital antitrust rules, which become enforceable from March 2024, will bring about a range of changes for the designated gatekeeper platforms. Digital services will be prohibited from pre-installing certain applications and showing favoritism towards their own services. Moreover, these companies will face restrictions on the combination of personal data between different services. They will be required to allow third-party payment systems on their platforms and enable users to download apps from alternative online stores on their mobile devices.
Europe is completely reorganizing its digital space to protect EU citizens better and enhance innovation for EU startups and companies, stated EU industry commissioner Thierry Breton.
This regulatory overhaul aims to balance safeguarding EU citizens and fostering innovation within the EU’s digital ecosystem. By curbing the dominance of gatekeeper platforms and promoting fair competition, the EU seeks to enhance user protection while facilitating a thriving environment for startups and companies.
In response to these developments, Booking.com has expressed its intention to meet the gatekeeper threshold by the end of the year and subsequently notify the EU executive. The European Commission is set to confirm the gatekeeper designations by September 6 after carefully reviewing the data provided by the companies. Once confirmed, the designated companies will have six months to ensure compliance with the DMA rules.
Violations of the regulations can result in fines of up to 10% of the annual global turnover for the companies. These stringent enforcement measures underline the EU’s commitment to maintaining fair competition and creating a level playing field within the digital landscape.
As Europe takes significant steps to restructure its digital space, the tech industry braces itself for a new era of regulation. The compliance of major tech giants with the EU’s digital antitrust rules marks a pivotal moment that is poised to shape the future of digital markets within the European Union.