Europe 1 with AFP 13:22 pm, September 06, 2023

Five US digital giants - Alphabet, Amazon, Apple, Meta and Microsoft - as well as China's ByteDance, which owns TikTok, will be subject to new, stricter EU rules to curb anti-competitive practices, according to a list unveiled on Wednesday.

The Digital Markets Regulation (DMA) must profoundly change the business models of these behemoths, accused of crowding out competition by abusing their dominant position. This legislation opens a new front between the EU and big tech, with new legal battles on the horizon.

The Commission has designated a total of 22 key platforms belonging to these six groups: four social networks (TikTok, Instagram, Facebook, LinkedIn), two instant messengers (WhatsApp and Messenger), three operating systems (Android, iOS, Windows), one search engine (Google), two browsers (Chrome, Safari).

>> READ ALSO - 'No time to lose' regulating AI in the EU, says European Commission Vice-President

The list also includes six intermediation services (Google Maps, Google Play, Google Shopping, Amazon Marketplace, App Store and Meta Marketplace), the video-sharing site Youtube as well as advertising services from Google, Amazon and Meta.

At the initiative of the text, Commissioners Margrethe Vestager and Thierry Breton hope to promote the emergence of European start-ups and improve the services offered to consumers. After years of chasing infringements in lengthy legal proceedings, Brussels wants to act faster and stronger.

The DMA imposes on the most powerful players a straightjacket of obligations and prohibitions to be respected under penalty of fines that can reach 20% of their worldwide turnover in the event of recidivism.

"The rules of the game have changed"

"We have already started talking to companies who have understood that the rules of the game have changed," explains Thierry Breton. He says that the European Commission, which will have the power of control and sanctions, "will not hesitate to take strong measures". The aim is to act before abusive behaviour has already destroyed competition and created a quasi-monopoly like Google's in search engines.

The legislation "changes the digital industry in Europe and transforms an unregulated sector into a deeply regulated one," said Alexandre de Streel, academic director of the Centre on Regulation in Europe (CERRE).

>> LISTEN - Videoconference meeting: artificial intelligence now able to report

Among the new rules, the EU will impose interoperability of the targeted messaging services. WhatsApp and Messenger, both owned by Meta, will have to allow their users to communicate with competing products such as Signal.

The regulation will apply from March 6 to these firms designated Wednesday as "gatekeepers", because of their size that makes them essential in their activities. In the meantime, affected groups will have to submit a report detailing how they have complied with them.

Inter

A few rules come into effect immediately. This is the case with the new obligation for these platforms to inform the Commission of any takeover transaction, regardless of the size of the target.

In addition, Google will be banned from any favoritism towards its own services in its search engine results, as it has been accused of doing with its online sales site Google Shopping.

The new law will prevent e-commerce giant Amazon from using data generated on its sites by corporate customers to better compete with them. The DMA will force Apple to allow its products, such as its famous iPhone or iPad, other application stores than the Apple Store.

A regularly reviewed list

Legal remedies are to be expected given the importance of the interests at stake. The new regulation "is a complex law in a complex environment, it is inevitable to have legal challenges at the beginning," de Streel said. The list of "gatekeepers" will be regularly reviewed to take account of market developments.

Three Microsoft services (the Edge browser, the Bing search engine and Microsoft Advertising) are the subject of additional research by the Commission for possible future designation, as are the iMessage messaging service and Apple's iPadOS operating system. The Apple brand said it was "very concerned" about the new rules, believing that they pose problems for privacy and data security.

Microsoft welcomed the fact that its three services meeting the criteria to be targeted by the legislation are currently exempt. "We welcome the Commission's decision to open a market investigation to examine our request for exemption from Bing, Edge and Microsoft Ads – which operate as challengers in the market," a spokesperson said.

"We will continue to work closely with the European Commission to comply with the law," said Oliver Bethell, Google's chief legal officer.