The European Commission has named six Big Tech companies as gatekeepers of the digital economy, making them subject to stricter rules.
Five American companies – Alphabet, Amazon, Apple, Meta and Microsoft – and one Chinese – ByteDance – are the first to be given the designation. As a result, they will now face legal obligations to change the way in which their popular services, such as messaging, social media, video-sharing and Internet browsers, are offered online.
The move is part of the Digital Markets Act (DMA), a pioneering law that adapts long-standing principles of competition policy to the new reality of the 21st century, where a few corporations have amassed enormous influence over the free market, often to the detriment of small businesses and daily users.
The hand-picked companies are considered gatekeepers because they have an annual turnover of at least €7.5 billion in the European market or a market capitalisation of at least €75 billion, and also more than 45 million monthly users and 10,000 yearly business users across the European Union territory.
This economic might has granted them an "entrenched and durable" position of dominance in the digital economy, the European Commission says, and requires a new set of stringent rules that can rein their power excesses, bring down obstacles for new competitors and create greater accountability.
"It's a very important milestone for freedom and innovation online in Europe," said Thierry Breton, European Commissioner for the internal market, promising strong enforcement. "No online platform can behave as if it was too big to care."
The obligations are extensive and structured as "dos and don'ts."
For example, gatekeepers will be banned from ranking their own products or services in a more favourable manner, a long-running point of contention between Big Tech and SMEs.
They will also have to allow users to easily unsubscribe from core services, change default settings and remove pre-installed apps to install third-party alternatives.
Similarly, platforms will have to ask users for their explicit permission before combining the personal data obtained from different services, such as Instagram and Facebook, both owned by Meta, and producing targeted advertising.
The provisions will take full effect in six months, a period during which the gatekeepers will have to inform the European Commission of how they intend to abide by the law.
In case of non-compliance, the executive can impose fines of up to 10% of the company's worldwide turnover, which can double if the wrongdoing persists. Brussels might also impose remedial measures such as forcing a corporation to sell a part of its business.
From Google Maps to TikTok
The designation as gatekeepers had been widely expected by the industry and the targeted companies, some of which have already updated their operations in a bid to pre-emptively align themselves with the legislation.
As a starting point, the specific services subject to the rules are:
- Alphabet: Android, Chrome, Google Search, Google Maps, Google Play, Google Shopping, Google Ads, YouTube.
- Amazon: Amazon Marketplace, Amazon Ads.
- Apple: App Store, Safari, iOS.
- ByteDance: TikTok.
- Meta: Facebook, Instagram, WhatsApp, Messenger, Meta Marketplace, Meta Ads.
- Microsoft: LinkedIn, Windows PC OS.
The list is open and companies can be added or removed over time.
The European Commission is looking into whether four additional services – Microsoft's Bing, Edge and Advertising, and Apple's iMessage – should be qualified as "core platform services" and therefore be brought under the framework.
Notably, two well-known, widely-used email providers – Alphabet's Gmail and Microsoft's Outlook – were excluded from the initial selection after the parent companies successfully argued against the designation.
Samsung, the South Korean tech giant, was equally removed, despite the company having previously notified the Commission of its potential to be a gatekeeper.
X, formerly known as Twitter, was also spared.
Asked about these omissions, senior EU officials said they could not disclose details due to the confidential conversations with the firms but underlined the selection would be proportional to the role the platforms play as a "gateway" for users and businesses.
Adopted in September 2022, the DMA marks a new chapter in the EU's competition policy, whose foundational principles date back to the origins of European integration.
With the law, Brussels turns around its traditional philosophy: instead of focusing on protracted legal cases against malpractices that have been going on for years, the DMA introduces ex-ante rules to prevent the offense from arising in the first place.
The "dos and don'ts" imposed on the gatekeepers will knock down barriers to market entry and make it easier for start-ups to compete vis-à-vis Big Tech, says Alexandre De Streel, a senior researcher at the Centre on Regulation in Europe. This shift will lead to greater choice and transparency for consumers.
"The idea is to de-silo the digital economy," De Streel told Euronews in an interview.
"It's a law that helps promote business users, so the app developers, the sellers on Amazon, the small players who want to be active in the digital economy, and ultimately, because those will be helped by the law, the end user, you and me, will benefit of more choice and innovation. This is a law that's in the general interest."
Unlike the General Data Protection Regulation (GDPR), whose enforcement relies on national authorities and often yields asymmetrical results, the implementation of the DMA will be centralised in a special unit inside the European Commission that will gather 80 staff members by 2024, including legal experts, data scientists and policy officers.
Given its ground-breaking nature, the legislation is expected to resonate beyond the bloc's borders and have a spill-over effect in other countries that share the same concerns about the excessive, unchecked market power wielded by Big Tech.
This article has been updated with more information about the DMA.