There will be new rules for tech giants such as Meta, Google and Apple in the European Union. Negotiators from member states and the European Parliament agreed on Thursday evening on the interpretation of the Digital Markets Act, which is intended to limit the power of tech companies. Among other things, the new laws could allow communication from one messaging service to another, such as from WhatsApp to Telegram. iPhone users should also be able to install apps outside of the App Store.
The deal marks a “new era of tech regulation,” said Andreas Schwab, rapporteur for one of the committees involved. “The Digital Markets Act is halting the growing dominance of Big Tech. From now on, large Internet companies must show that they allow fair competition on the Internet. In this way, Europe ensures more competition, innovation and choice for users.”
Read also this article about the intense lobbying practices of Big Tech in Brussels
The Digital Markets Act is digital policy unlike anything seen before, since the rules for the internet were enacted in 1998. For example, with effect from the policy, Google may no longer collect data from various services in order to offer personalized advertising without the explicit consent of users. And Apple users could get Safari and other pre-installed apps from their iPhone or iPad.
To avoid too much regulation, tech companies spent almost in 2020 100 million euros of lobbying activities in Brussels – more than any other sector. How the Digital Markets Act will play out exactly remains to be seen. It is not unlikely that tech companies will challenge restrictions in court. In any case, Google seemed to anticipate the new policy on Wednesday. The company announced that it would experiment with direct payments in Spotify, as an alternative to payments in the Google Play Store, for which Google charges a kind of commission of 15 percent.
Internet companies that violate the new rules can expect fines of 10 percent of worldwide annual turnover. Repeatedly even 20 percent. The new policy only applies to companies with a market capitalization of at least 75 billion euros, an annual turnover of 7.5 billion euros and at least 45 million European users per month. The rules could theoretically go into effect on January 1 next year, but tech companies have asked for more time to prepare for the changes.