The European Union has agreed to limit the powers of
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The European Union has agreed to limit the powers of tech giants

The world’s largest technology companies have to rethink their business models in Europe – the European Parliament and representatives of the EU member states agreed the night before to limit the power of the tech giants. EU Council Presidency France confirmed that a preliminary agreement had been reached after eight hours of negotiations.

    Image source: Capri23auto / pixabay.com

Image source: Capri23auto / pixabay.com

The Digital Markets Act (DMA) sets rules for companies that control access to the largest digital platforms and the data of the users registered there. We are talking about social networks, search engines, online advertising and cloud computing services, video hosting, as well as developers of operating systems, web browsers and voice assistants.

In particular, the law will oblige to ensure compatibility between messengers and business users will have full access to their data; Platforms will be able to promote products that compete with those platforms, and platforms’ participation in closing deals with customers will no longer be mandatory. Tech giants will no longer be able to prioritize their own services over competitors’ offerings, and pre-installed software can no longer be uninstalled.

The DMA applies to companies with a market cap of $75 billion or more, annual revenue of $7.5 billion or more, and platforms with 45 million or more monthly visitors. Violation of this law is punishable by a fine of up to 10% of annual worldwide sales on the first occasion and up to 20% on subsequent occasions.

    Image source: succo / pixabay.com

Image source: succo / pixabay.com

tech giants reacted on initiative is predictably negative. Apple said so “DMA will create unnecessary gaps in our users’ privacy and security, and others will prevent us from benefiting from intellectual property in which we invest heavily.”. Google threatened to do so “Some of these rules will slow down innovation and limit Europeans’ choices”.

But in Europe hold tight the exact opposite position. EU Competition Commissioner Margrethe Vestager said the DMA will for the first time limit the power of tech giants through legislative mechanisms rather than lengthy antitrust investigations. Ioannis Kokkoris, Professor of Competition Law at Queen Mary University of London, expressed hope “regulatory straitjacket will be tightened worldwide”.

Nicolas Petit, professor of competition law at the Florence European University Institute, believes that the new law will, on the contrary, stimulate innovation and improve the business models of some companies – he predicted a shift towards subscription models and device-level monetization as price increases. And Thomas Vinje, a partner at Clifford Chance, a Brussels-based law firm, said there was a need to expand the staff of European law enforcement officials – today 80 people have been appointed to oversee the implementation of DMA requirements and that is clearly not enough. His colleague from Brussels law firm Dechert, Alec Burnside, said it was too early to relax and that once the law came into force, the text would have to be adjusted again and again. But it’s still a start.

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About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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