Effects of EU's DMA on Amazon, Apple, Meta and more
The European Union has rolled out regulations under its Digital Markets Act (DMA), targeting six major tech companies. They include Alphabet, Amazon, Apple, TikTok's parent company ByteDance, Meta, and Microsoft. These rules aim to establish a more equitable online market by addressing concerns such as buyouts, interoperability, marketplace conflicts, and ad transparency. If these tech giants fail to comply with the act, which will come into effect on March 7, they could face fines totaling billions of Euros.
Safeguarding rivals and freedom of messaging
Under these new regulations, all buyouts must be reported to the European Commission, regardless of their size. This will prevent tech giants from using their profits to eliminate potential competitors. The DMA also mandates interoperability between messaging apps like Meta-owned Messenger and WhatsApp, and alternatives like Signal or Telegram. This will ensure users can stay connected with loved ones, while requiring that communications are encrypted from one user to another.
Fair shopping practices and opening marketplace
The DMA will also tackle conflicts of interest on platforms like Amazon by prohibiting the online giant from exploiting its role as a marketplace to promote its own goods as a retailer. Gatekeepers will be required to share crucial information with business customers as well. Meanwhile, Apple will have to allow companies to use their own payment systems and enable apps to be downloaded from outside the Apple store, despite its claims that opening up iPhones will pose security threats.
Greater advertising transparency
The world's largest online advertisers, Google's search engine, as well as Meta's Facebook and Instagram, will also be impacted. They will be required by DMA to disclose more information about how their advertisements work, and their actual effectiveness to advertisers and publishers. This will help companies better understand their customers, and potentially explore new ways to reach their target audience, reducing their dependence on Google or Facebook for advertising insights.
What about TikTok and Microsoft?
ByteDance-owned TikTok's attempt to prevent the EU from designating it as a "gatekeeper" firm, has been rejected by EU's General Court. In compliance with the DMA rules, it will have to make sweeping changes to its platform for the time being, even if its appeal is approved in the future. As far as Microsoft is concerned, it will not be considered a gatekeeper for the following services: Microsoft Advertising, Edge web browser, and Bing search engine.
