Thursday, July 7, 2022

The EU could start enforcing rules to regulate Big Tech in spring 2023

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The European Union aims to begin enforcing the Digital Markets Act (DMA) by spring 2023, Commission Vice-President Margrethe Vestager announced at the International Competition Network (ICN) conference last week. as first reported by TechCrunch† Vestager previously stated that the antitrust law, which introduces a new set of rules to curb Big Tech’s power, could be implemented as early as October this year.

“The DMA will go into effect next spring and we will be gearing up for enforcement as soon as the first reports come in,” Vestager said during her speech at the ICN. As noted by TechCrunchVestager suggests that the Commission will be ready to act against any violations by “gatekeepers” — a classification that includes Meta, Apple, Google, Microsoft and Amazon — once the laws come into effect.

The DMA, which still needs final approval from the Council and Parliament, defines gatekeepers as companies with a market capitalization of more than €75 billion ($82 billion) and a social platform or app with at least 45 million monthly users. These entities can face fines of “up to 10 percent of their total worldwide revenue in the previous fiscal year” if they are found to be in violation of the DMA rules, a fee of up to 20 percent in the event of repetition.

In accordance with the DMA, gatekeepers have three months to report their status to the Commission, followed by a waiting period of up to two months to receive confirmation from the EU. This wait, coupled with the delayed DMA enforcement, could mean we won’t see any real battles between the EU and Big Tech until late 2023.

“This next chapter is exciting. It means a lot of concrete preparations’, explains Vestager. “It’s about setting up new structures within the Commission… It’s about hiring staff. It is about preparing the IT systems. This concerns the drafting of further legal texts about procedures or notification forms. Our teams are currently busy with all these preparations and we aim to come forward with the new structures very soon.”

Reducing the enforcement of the DMA could give the Commission more time to prepare, but since TechCrunch points out that the delay could also serve as a catalyst for criticism if the Commission fails to address major violations occurring between now and the time the DMA becomes law.

When passed, the DMA is likely to disrupt the business models used by the world’s tech giants. First, it could mean that Apple should allow users to download apps from outside the App Store, an idea Apple CEO Tim is categorically against, as he argues that sideloading could “destroy” an iPhone’s security. It may also require WhatsApp and iMessage to become interoperable with smaller platforms, a policy that could make it more difficult for WhatsApp to maintain end-to-end encryption.

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