EU approves landmark legislation to regulate Apple and other big tech companies

European Union lawmakers have approved landmark legislation to heavily regulate Apple, Google, Meta and other big tech companies.

The Digital Markets Act (DMA) and the Digital Services Act (DSA) were proposed by the European Commission in December 2020. Now, brought together in a “digital services package”, the legislation has been formally adopted by the European Parliament and aims to meet “gatekeeper” of large technology companies.

Apple is almost certain to be classified as a “gatekeeper” due to its large annual revenue in the EU and its ownership and operation of platforms with a large number of users. ‘active users, and its “well-entrenched and enduring position” due to the length of time it has met these criteria and will therefore be subject to the rules set out in the DMA. As part of DMA, gatekeepers may have to:

  • Allow users to install apps from third-party app stores and download them directly from the internet.
  • Allow developers to offer third-party payment systems in apps and promote offers outside of gatekeeper platforms.
  • Enable developers to integrate their digital apps and services directly with those owned by a gatekeeper. This includes the interoperability of messaging, voice call and video call services with third-party services on demand.
  • Give developers access to any hardware functionality, such as “near field communication technology, secure elements and processors, authentication mechanisms, and the software used to control these technologies.”
  • Make sure all apps are uninstallable and give users the option to unsubscribe from core platform services under subscription-like terms.
  • Give users the option to replace the default voice assistant with a third-party option.
  • Share data and metrics with developers and competitors, including marketing and advertising performance data.
  • Establish an independent “compliance function” group to monitor its compliance with EU law with an independent senior manager and sufficient authority, resources and access to management.
  • Inform the European Commission of their mergers and acquisitions.

DMA also seeks to ensure that gatekeepers can no longer:

  • Pre-install certain software applications and require users to use all important default software services such as web browsers.
  • Require app developers to use certain services or frameworks, including browser engines, payment systems, and identity providers, to be listed in app stores.
  • Give preferential treatment to their own products, applications or services or rank them higher than those of others.
  • Reuse the personal data collected during a service for the needs of another service.
  • Establish unfair conditions for business users.

The Digital Services Act (DSA), which requires platforms to do more to monitor the internet for illegal content, was also approved by the European Parliament.

The DMA says guardians who ignore the rules will face fines of up to 10% of the company’s total worldwide annual revenue, or 20% for repeated violations, as well as periodic penalties up to 5% of the company’s worldwide total. annual sales. Where custodians commit “systematic breaches”, the European Commission may impose additional penalties, such as forcing a custodian to sell a business or parts thereof, including units, assets, intellectual property rights or trademarks, or prohibit a custodian from acquiring any company that provides services in the digital sector.

So far, Apple has strongly resisted attempts by governments to impose changes to its operating systems and services. For example, Apple simply chose to pay a fine of $5.5 million every week for months in the Netherlands instead of obeying orders from the Authority for Consumers and Markets (ACM) to allow third-party payment systems in Dutch dating apps.

EU antitrust chief Margrethe Vestager has set up a DMA task force, which around 80 officials are expected to join, but some lawmakers have called for an even bigger task force to counter the power of big tech companies . All that remains is to adopt the Digital Services Package by the European Council before coming into force in the autumn.

Beyond the European Union, Apple’s ecosystem is coming under increasing scrutiny from governments around the world, including the US, UK, Japan , South Korea, etc. and interoperability. Increased cooperation is expected between governments around the world on the issue and experts expect a “brutal battle” between Apple and global regulators.

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About Michael S. Montanez

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