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Industrial Policy

EU adopts Digital Markets Act

The European Union today adopted landmark rules clamping down on anti-competitive abuses by the world’s largest technology platforms, in a move that will set the standard for leveling the playing field across global digital markets.  

In an agreement brokered this evening, negotiators from the European Parliament and the Council reached a political agreement on the Digital Markets Act, which establishes a series of prohibitions and obligations for companies including Google, Meta, Apple and Amazon, and a number of smaller platforms. It is likely to include accommodation platform Booking and Chinese e-commerce giant Alibaba.

Included in the rules’ scope will be platforms with a market capitalization of €75 billion or turnover in the European Economic Area equal to or above €7.5 billion

“The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies,” lead MEP Andreas Schwab said. “From now on, Big Tech companies must show that they also allow for fair competition on the internet.”

“The new rules will help enforce that basic principle. The time of long antitrust cases is over during which the authorities were lagging behind the big tech companies. Europe is thus ensuring more competition, more innovation and more choice for users.”

The new rules for so-called gatekeeper platforms, derived from years of antitrust enforcement in the digital economy, include restrictions on combining personal data from different sources, mandates to allow users to install apps from third-party platforms, prohibitions on bundling services, and a prohibition on self-preferencing practices.

Parliament also succeeded in convincing the Council of interoperability requirements for messaging services, meaning outfits such as WhatsApp, Facebook Messenger or iMessage will have to open up and interoperate with smaller messaging platforms. For group chats, this requirement will be rolled out over a period of three years.

Penalties for breaching the rules can be up to 10 percent of annual worldwide turnover in the case of first infringements, and even up to 20 percent in the case of repeated infringements.

Parliament was also successful in its call to get web browsers and virtual assistants into the scope of core platform services.

The Commission, as lead enforcer of the rules, is now tasked with staffing the relevant services that will be involved in the designation procedures, as well as preparing to enforce the obligations and the prohibitions, which become applicable later this year.

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