You may have heard so far that the European Union is preparing to have a say in how big tech companies like Apple, Google and Meta operate. This is the legislation called DMA (Digital Markets Act) that the European Commission has been preparing for some time. Today, The Verge reports that changes could come as soon as spring 2023.
European Commission Executive Vice-President Margrethe Vestager has set herself the goal of audit (or at least issue fines if out of control) tech giants such as Apple, Google, Amazon, Meta and others with DMA. Previously, she predicted the battle would start in October, but it looks like we have a better chance of see some action in the spring of next year.
The waiting game depends on when the DMA will be implemented. The legislation is currently awaiting Council and Parliament approval.
However, the EU is preparing to enforce the new laws. The legislation focuses on so-called “gatekeeper” companies, which, if you’ve been listening so far, might lead you to think these are the big tech companies mentioned earlier.
If you’re curious, here’s the definition of successful companies as “gatekeepers”: the company must have a market capitalization (a fancy way of saying the total value of its shares) of more than 75 billion euros and own a platform or a paid social app at least 45 million monthly users.
These companies could be inflicted fines of up to 10% of their total worldwide turnover (for the previous year) if they do not comply with the legislation. For repeat offenders, the fine can be as high as 20%, which could help the EU get its message across.
Large tech companies will therefore have 3 months to declare their status to the Commission, then they will have to wait up to 2 months to receive confirmation from the EU. Indeed, it looks like the giant mechanism might take a while to start working (you can’t expect the tech giants and government commissions to fight a fierce battle, so fast that it is difficult to see).
And as you can imagine, the EU still has a lot of work to do before. Hire staff, prepare the hundreds of monitors and computers to analyze the data. In other words, it will take a tremendous amount of work to develop such legislation to achieve. Vestager also mentions that they will have to draft legal text on various procedures.
The end of an era
However, when the DMA is adopted, it may mark the end of an era. In case you haven’t heard of it yet, this is the legislation that could force Apple to allow users to download apps outside of the App Store, as well as requiring WhatsApp and iMessage to become interoperable with smaller chat applications.
the side loading (the process of downloading apps to the iPhone from somewhere other than the App Store) is arguably the biggest change that DMA will force on Apple. Previously, Apple was concerned that this might weaken iPhone security.
On the other hand, an even bigger cause of headaches for Apple is that the DMA would force Cupertino to allow App Store customers to make in-app payments through other payment platforms (you you may have heard of the infamous Apple Tax, a 30% discount Apple takes from developers when payments are made through the App Store).
That being said, it will be interesting to see DMA in action and what changes the tech giants will have to implement (and if they will comply with).