The pending Digital Markets Act from the EU is set to target a larger group of tech companies that goes beyond big tech
Following discussions on the law’s final aspects among the European Commission, European Parliament and member states, companies with a market cap of at least €75 billion and at least 45,000 active users are set to be affected, reports the Financial Times.
In addition, firms in question must oversee one core online “platform” service, such as a social network or web browser, to be subject to the act.
The new legislation, which could be unveiled as early as Thursday, is designed to prevent anti-competition practices on the part of Big Tech corporations such as Facebook and Google, but could also impact organisations such as Booking.com and Alibaba.
According to involved lawmakers, the new Digital Markets Act will declare:
- a compulsory choice of email applications and search engines offered to consumers buying new smartphones;
- the legal right for users to uninstall applications, which would prevent the preloading of apps currently practiced by vendors such as Apple and Google;
- enforced interoperability between messaging services, allowing users to send messages to recipients using an entirely different ecosystem.
How the act could affect innovation
While EU regulators believe the new law will transform tech practices for the better — German MEP Andreas Schwab believes it could allow for “competitors to enter a market that has been dominated by a few companies” — critics have stated that innovation could be stifled.
In particular, Nick Clegg, president of global affairs for Facebook’s parent company Meta, warned that the act “risks fossilising how products work and preventing the constant iteration and experimentation that drives technological progress”.
In response, EU internal market regulator Thierry Breton told the Financial Times: “We have tried in the past to address gatekeeper issues through competition cases.
“But these cases can take years and in the meantime, the harm to SMEs and innovators is done. We needed an innovative response. And we [have] managed, against all odds.”
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