EU imposes stricter market restraints on tech giants: What this means for the industry

In Brussels, Belgium, the European Union (EU) has revealed a list of digital giants that will face new restrictions on their operations, including Apple, Meta (owner of Facebook), and ByteDance (parent company of TikTok). These measures, part of the Digital Markets Act (DMA), aim to create a fairer market and protect European consumers online. However, legal battles may arise as companies consider challenging the new regulations. The EU’s antitrust body, the European Commission, has identified 22 “core platform” services from six tech giants, including Google, Amazon, Apple, Meta, Microsoft, and ByteDance. Some of the services affected by the DMA include Apple’s App Store and Meta’s Facebook, Instagram, and WhatsApp. The law requires compliance by March 6, 2024, and non-compliance can result in fines of up to 10 percent of a company’s global revenues. One significant change under the DMA is the requirement for interoperability between messaging apps to enhance user convenience. Despite criticisms and potential legal challenges from companies like Apple and Microsoft, the DMA, along with the Digital Services Act (DSA), aims to strengthen regulations against tech giants that have been accused of acting to the detriment of users. The EU is determined to prevent large players from stifling the growth of smaller competitors by acquiring them, referring to past examples such as Facebook’s acquisition of Instagram and WhatsApp and Google’s acquisition of YouTube and Waze. Apple, in particular, will be affected by the new rules as they will be required to permit alternative app stores on their products, thereby reducing their control over software downloads and payments. The EU is also investigating whether Apple’s iPadOS should be considered a “gatekeeper” despite not meeting the thresholds. While legal challenges may arise due to the complexity of the law and the environment, critics argue that these regulations are necessary to rein in the economic power of tech giants and create a more competitive and consumer-friendly market. The EU is also preparing to pass the world’s first law on artificial intelligence, suggesting that big tech will face further regulation in the near future.

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