The European Union (EU) has given the final seal of approval to two landmark pieces of legislation designed to curb the power of the world’s largest technology firms.
The first to come into effect will be the Digital Markets Act (DMA), which is designed to prevent so-called “gatekeepers” from abusing their dominant position to squeeze competitors out of markets such as search, browsers, messaging and email. These new rules will apply from early 2023 onwards.
The Digital Services Act (DSA), meanwhile, aims to limit the spread of illegal content and disinformation on digital platforms, in addition to outlawing certain manipulative advertising practices. The conditions of the DSA will start to be enforced roughly one year later.
Both proposals flew through their respective votes with the support of an overwhelming majority.
New rules for Big Tech
The two new pieces of legislation will attempt to tackle these various, complex issues by imposing a number of additional rules on the likes of Google, Apple, Meta, Amazon and Microsoft.
Under the DSA, for example, digital service providers will be obliged to put in place new measures to ensure illegal content can be identified and taken down swiftly and implement new checks on online marketplace traders.
In addition, platforms that rely on AI-powered feeds to serve content to users will be asked to lay bare their algorithms for inspection by third parties, and to offer further insight into their content moderation practices.
The DMA, on the other hand, includes measures to prevent gatekeepers from ranking their own products higher in search results and blocking users from uninstalling preloaded applications, as well as obligations to provide people with simple means of switching to alternative services.
The legislation also mandates a level of interoperability between messaging services, which could have major ramifications for the likes of WhatsApp and Messenger, both of which are owned and operated by Meta.
“For too long tech giants have benefited from an absence of rules. The digital world has developed into a Wild West, with the biggest and strongest setting the rules. But there is a new sheriff in town,” said Christel Shaldemose, Rapporteur for the DSA.
“Now rules and rights will be strengthened. We are opening up the black box of algorithms so that we can have a proper look at the money-making machines behind these social platforms.”
A similarly bullish message was shared by Andreas Scwab, Rapporteur for the DMA, who said:
“We no longer accept the ‘survival of the financially strongest’. The purpose of the digital single market is that Europe gets the best companies and not just the biggest.”
Whether these new rules go far enough, or can be enforced effectively, is another matter. There are those that believe the DMA does little to prevent gatekeepers from abusing the power of the default, for example. And although the tech giants could be fined up to 20% of global turnover for repeated non-compliance, history has shown they are more than willing to take a few hits to the balance sheet.
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