The clock is now really ticking for Big Tech. On Wednesday, the European Commission announced which major tech companies will have to radically adjust their revenue models in preparation for the Digital Markets Act that will take effect from March next year. According to Brussels, these six ‘gatekeepers’ are so dominant that measures are needed to prevent abuse of power by them.
Designating the companies is an important step in rolling out the new European legislation that aims to tame the power of Big Tech. Globally, it is the first attempt to curb the market dominance of the tech companies in advance, and therefore not through often lengthy competition lawsuits afterwards.
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The list of companies targeted by Brussels comes as no great surprise to anyone: Alphabet (Google’s parent company), Amazon, Apple, ByteDance (TikTok), Meta (WhatsApp and Facebook) and Microsoft. Criteria for being considered a gatekeeper include an annual turnover of more than €7.5 billion and at least 45 million monthly active EU users. Together, the companies now designated offer 22 services that fall under the new rules.
For some tech companies, this involves a large list of services. For example, Alphabet has to work with, among other things, the Google Chrome internet browser, but also with the YouTube video service and the Android operating system. For ByteDance, it is only about social media app TikTok.
The adjustments that the tech companies have to make are major. For example, they may no longer favor their own services or products on their platform over those of competitors. This means, for example, that Amazon may not offer its own products more prominently in its web store than those of other suppliers. The companies are also no longer allowed to offer their own services as an automatic choice: for example, Microsoft’s own internet browser on computers, or certain apps on the operating systems of Apple or Google.
The most concrete change for users will probably be that you can also send messages to other services with one chat service. That obligation will apply to WhatsApp and Facebook Messenger, both part of Meta. For example, you must be able to reach someone on Signal via WhatsApp.
The tech companies now have six months to implement the adjustments. From March 6, 2024, they must comply with the law. They must therefore report in an extensive report how they comply with the new rules. They are already required to register every company they buy with the competition department of the European Commission – no matter how small the purchase.
European Commissioner Thierry Breton (Internal Market) spoke in a video message on Wednesday of an “important milestone for online freedom and innovation”. He emphasized that the companies will soon face possible sanctions. “No tech company can be more like”too big to care‘ to behave.” The sanctions can be severe: from fines of up to 20 percent of global turnover, to mandatory splitting up of the company in extreme cases.
It is not clear whether it will remain with the services designated on Wednesday. The Commission is still investigating whether messaging service iMessage from Apple and search engine Bing from Microsoft should also fall under the obligations. A few companies have already been able to convince the Commission that a service does not fall under the rules: Google’s e-mail service Gmail and Samsung’s internet browser, among others, escape the ban. It is expected that various tech companies will try to challenge the rules in court.
The new rules are part of a large package of tech legislation that the European Union is currently rolling out. Recently, new rules came into force to protect internet users against incorrect information, hate speech and misuse of personal data.