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What does the EU’s new Digital Markets Act mean for big tech?

The European Union (EU) has unveiled a new set of laws aimed at making Europe's tech sector more competitive and protecting consumers from online harms. The Digital Markets Act (DMA) came into force in May 2023, and the gatekeepers, the companies that will be subject to the strictest rules, were finalized in September 2023. The gatekeepers have until March 2024 to comply with the rules and could be fined up to 10% of their turnover if they don't.

What does the Digital Markets Act mean for big tech?

The DMA will have a significant impact on big tech companies, which have been criticized for their dominance of the online market. The new law will force these companies to share data with rivals, remove barriers for smaller firms to get onto platforms and reach users, and make it easier for consumers to switch between different services.

Key features of the DMA

The DMA defines 22 companies and services as "gatekeepers." These are companies with an annual turnover of more than €7.5 billion, a market value above €75 billion, and 45 million active monthly users in the EU. The gatekeepers include the six big tech firms: Alphabet, Amazon, Apple, Meta, Microsoft, and ByteDance (which owns TikTok). Other gatekeepers include services such as WhatsApp, Apple's Safari browser, Google Pay, and Amazon Marketplace.

Under the DMA, gatekeepers can no longer:

Rank their own products above those of rivals on their own platforms or marketplaces.
Make it difficult to delete preset apps that come with the phone.
Merge data from different platforms without users' consent.
Prevent customers from linking up with businesses outside of their platforms.
Track user data for advertising without express consent.

Impact on big tech

The Digital Markets Act is expected to have a significant impact on big tech companies. The new law will force them to change the way they operate and make it easier for consumers and smaller businesses to compete.

For example, the ban on ranking their own products above those of rivals could lead to more choice and lower prices for consumers. The requirement to make it easier to delete preset apps could give consumers more control over their devices. And the ban on tracking user data for advertising without express consent could give users more privacy.