Source: AFP
Faster and faster crackdown on abuses of power by the world’s biggest digital companies: that’s the promise of the European Union’s new legal arsenal, which comes into full force on Thursday.
The Digital Markets Act (DMA) marks a revolution in competition law, with the power to transform the way the world’s biggest players behave online.
Its full impact won’t be felt immediately, but as early as Thursday six so-called “gatekeepers” will face tighter restrictions: Google parent Alphabet, Amazon, Apple, TikTok owner ByteDance, Meta and Microsoft.
Learning from years of long-running legal cases that tried — often in vain — to end the anti-competitive practices of tech titans, the EU appears to have finally armed itself with the powers to bring companies to heel.
The DMA has a list of dos and don’ts for businesses to ensure there is a level playing field. For example, giving users more choice when choosing a web browser on their devices rather than forcing a default choice.
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Google, for example, will be prohibited from favoring its own platforms, such as Google Shopping, in search engine results.
Meanwhile, Apple needs to allow iPhone users the ability to download alternative app stores to its own App Store and likewise for payment systems that compete with Apple Pay.
“Given the speed with which these markets are evolving and given the time that classic competition procedures take, it was essential to be able to intervene earlier, rather than after the damage has been done,” said Romain Rard, a lawyer at the law firm Gide company. in Brussels.
The “ridicule” of Apple
The six tech titans have announced a series of changes since coming under fire from the Commission, the EU’s powerful antitrust regulator, in September — giving them time to prepare.
But for Rard, it’s too early to draw any conclusions.
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“Is this minimal compliance without any real change in the companies’ behaviour, and if so, how far will the Commission be willing to go in implementing the DMA and higher penalties?” asked.
On Friday, 34 digital companies and organizations called on the commission to crack down on Apple — saying its planned changes to comply with the DMA “make a mockery” of the law.
What is certain is that the new law gives the EU stronger tools to ensure enforcement.
Currently, breaches of competition law can result in companies being fined up to 10 per cent of global turnover. This can be increased by up to 20 per cent for repeat offenders under the DMA.
Enhanced powers
The EU’s past experiences have shaped the new rules.
Since 2017, Google has been hit with around eight billion euros ($8.7 billion) in fines from the EU without addressing abuses linked to the powerful search engine.
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Critics say even such colossal fines are pocket change for the biggest tech companies — considering Google’s profits run to about 20 billion euros per quarter.
Those concerns are why the commission has given itself the power to crack down on offenders, forcing them to sell part of their business if necessary.
Some describe it as an “atomic bomb”. But would the EU dare to use it?
“We have been talking for months with companies to make it clear that the rules of the game have changed. Any company found to be non-compliant will face strong sanctions,” EU internal market commissioner Thierry Breton told AFP.
The committee will now study the compliance plans from each company and will continue to talk with the giants and interested third-party organizations.
The DMA will allow the EU to act more quickly by simplifying the burden of proof for the 100 or so experts responsible for implementing the rules in the commission.
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For example, under previous legislation, the Commission opened proceedings against Google in 2010, but only in 2017 was it able to hit the American giant with a fine of 2.4 billion euros.
After several appeals, Brussels is still waiting for the final decision from the EU courts.
Under the DMA, the commission has 12 months to make a decision after proceedings are initiated against a company. To avoid the suffocating tactics of lawyers who overwhelm the regulator with hundreds of pages, there will be a 50-page limit for documents.
“This is an important step that will enable progress,” said Andrea Collart, an antitrust specialist at Forward Global.
“DMA attempts to respond in a specific way to the needs of competitors who today cannot compete with the digital giants,” he added.
Source: AFP