A PYMNTS Company

Big Tech May Not Feel Impact Of EU’s New Online Rules Until 2024

 |  July 6, 2022

After years in the making, on Tuesday, July 5, the EU Parliament approved in plenary session landmark legislation that will set comprehensive standards for regulating the digital space. 

The EU Parliament approved the Digital Services Act (DSA) with 539 votes in favor, 54 votes against, and the Digital Markets Act (DMA) with 588 in favor and 11 against. The DSA sets clear obligations for digital service providers, such as Google, Meta or TikTok, to tackle the spread of illegal content, online disinformation and other societal risks. The DMA sets obligations for large online platforms acting as “gatekeepers” (platforms whose dominant online position make them hard for consumers to avoid) on the digital market to ensure a fairer business environment and more services for consumers. 

EU institutions reached an agreement on the scope of these bills already in March with some minor amendments in the following months until the final approval on Tuesday. Now that the laws are approved, what’s next? Google, Amazon, Meta, Apple and other online platforms won’t need to rush to make any changes as they still have a few months to comply with the new rules and make adjustment to their business models, if needed. 

After the approval in parliament on Tuesday, both laws need to be formally adopted by the Council — and this is likely to happen in July for the DMA and in September for the DSA. Then, the legal texts will be published in the EU Official Journal, and they will enter into force twenty days after publication. This means that the laws won’t start to be implemented until September or October the earliest. 

But then, the implementation period, which is between 6 and 15 months, varies between the two laws.  

For the DSA, its provisions will apply in 15 months or from January 2024, whichever comes later, after the entry into force. As regards the obligations for very large online platforms (i.e. Meta, Twitter, TikTok) and very large online search engines (i.e. Google), the DSA will apply earlier — four months after they have been designated as such by the Commission. However, the designation process could take a few months, and the designation is reviewed every six months. 

EU policymakers foresaw a shorter implementation period for the DMA. This law will start to apply six months following its entry into force, which could be in early 2023. However, gatekeepers will have up to six months after they have been designated to comply with the new obligations. This will happen when the European Commission designates a company as a gatekeeper. While this designation process is expected to be straightforward, based on quantitative criteria like the number of users or turnover in Europe, it may take another additional six months, according to the law. This could give large online platforms, in theory, until 2024 to start fully applying the new conditions set out in the DMA. 

It is then safe to assume that, leaving aside possible voluntary changes by the online platforms, the effects of the DMA and DSA on the largest Big Tech companies won’t start to be visible until late 2023 or early 2024. 

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.