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Tech Giants Rail Against Landmark Digital Markets Act

 |  March 27, 2022

The European Union’s newly-unveiled Digital Markets Act (DMA) is being blasted by big technology companies like Facebook, Google and Amazon for being more aggressive than originally anticipated, Financial Times reported on Friday (March 25).

Europe’s antitrust chief Margrethe Vestager won backing from EU members and lawmakers for the legislation, which requires gatekeeper firms to abandon anti-competitive practices or face fines of up to 20% of revenue for repeat offenses. The DMA goes into effect in October; if violated, it could lead to the breakup of offending big tech companies. 

Under the measure, for example, Meta, the parent company of Facebook and Instagram, as well as Google, will no longer be allowed to offer targeted ads using people’s data across multiple platforms without receiving explicit consent. Amazon won’t be able to use data collected from outside sellers to offer competing merchandise. Apple could be forced to allow alternatives to its App Store. 

Read More:The EU’s Proposal for a Digital Markets Act – an Ex Ante Landmark

“Faced with big online platforms behaving like they were ‘too big to care,’ Europe has put its foot down,” Thierry Breton, commissioner for the internal market, told the New York Times. “We are putting an end to the so-called Wild West dominating our information space. A new framework that can become a reference for democracies worldwide.”

Apple said that the DMA opens its users to privacy and security weaknesses and prevents the company from collecting payment for “intellectual property in which we invest a great deal.” 

Google said the legislation could stifle innovation and reduce freedom of choice to tech users in Europe, FT reported.

“The gatekeepers will now have to comply with a well-defined set of obligations and prohibitions,” Vestager said in a statement. “This regulation, together with strong competition law enforcement, will bring fairer conditions to consumers and businesses for many digital services across the EU.”

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