Restrictions for Google, Facebook & Co. – EU agreement on digital law is within reach

It is considered likely that negotiators from the EU states and the European Parliament will agree on a law on digital markets (Digital Markets Act, DMA) on Thursday. The DMA aims to curb the market power of tech giants like Facebook and Google.

“The whole thing will probably be completed there,” said parliamentary negotiator Andreas Schwab (CDU) before the round of negotiations (starting at 3 p.m.). The DMA is supposed to mean strict requirements for companies, fairer competition for their competitors and more freedom of choice for consumers when it comes to online offers. Ren Repasi (SPD) sees a paradigm shift in the regulation of digital markets. “We succeeded,” he told the German Press Agency. Europe is a pioneer here.

The DMA is part of a large digital package presented by the EU Commission in December 2020. The second part is the Digital Services Act (DSA), which Parliament and EU countries are still negotiating. The DSA deals with social aspects such as hate speech or counterfeit products.

Most recently, at the beginning of the millennium, the EU gave itself comprehensive rules for the Internet. Complaints are heard again and again today that the Internet is a legal vacuum and that it is difficult to enforce existing rules. So far, competition law from the analog world has not been able to prevent the rapid concentration of users and market power in a few digital groups.

The DMA is now targeting certain companies that are an important “gateway” to the end consumer for commercial users. In the future, these so-called gatekeepers will have to observe certain rules and regulations. A possible definition is that the company in question must have annual sales of at least EUR 7.5 billion or a market capitalization of at least EUR 75 billion.

In addition, they would have to operate a so-called central platform service with at least 45 million active users and 10,000 active commercial users per month. These platform services are likely to include search engines such as Google and social media such as Facebook. The US companies Google, Amazon, Facebook and Apple would be the first to be affected.

Their central platform services are to be forbidden, for example, to treat their own products and offers preferentially over those of the competition. Users should be able to delete pre-installed apps more often. Consumers should also be able to use a service without having to agree to data bundling across all offers from a gatekeeper. Violators face severe fines and even structural measures such as breaking up a company.

Unanswered questions concern, for example, the possible obligation for messenger services such as WhatsApp to open up to being able to receive messages from users of other providers in group chats as well. The EU Parliament and EU states still have to agree on the question of personalized advertising for minors.

Should a deal be reached, both sides would still have to formally confirm the agreement. The law should come into force at the beginning of October at the earliest, probably at the beginning of 2023. A transitional period of several months would then apply to the companies.

/wim/DP/eg

BRSSEL (dpa-AFX)

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