ANDREAS SCHWAB: “Europe is setting standards for how the digital economy of the future will function”
Negotiators from the European Parliament and the European Council have provisionally agreed the text of a Digital Market Act (DMA) that will obligate “gatekeeper” technology companies such as Apple and Google to “allow app developers fair access to the supplementary functionalities of smartphones (eg NFC chip)”.
The DMA will also prevent such companies requiring “app developers to use certain services (eg payment systems or identity providers) in order to be listed in app stores”, the European Council says in its summary of the proposed legislation.
In addition, the text of the DMA agreed by negotiators will require gatekeeper companies to:
Ensure that users have the right to unsubscribe from core platform services under similar conditions to subscriptionFor the most important software (eg web browsers), not require this software by default upon installation of the operating systemEnsure the interoperability of their instant messaging services’ basic functionalitiesGive sellers access to their marketing or advertising performance data on the platformInform the European Commission of their acquisitions and mergers.
It also states that such companies will no longer be able to:
Rank their own products or services higher than those of others (self-preferencing)Reuse private data collected during a service for the purposes of another serviceEstablish unfair conditions for business usersPre-install certain software applications.
The DMA defines a gatekeeper company as a platform that has had either “an annual turnover of at least €7.5bn (US$8.3bn) within the European Union in the past three years or have a market valuation of at least €75bn (US$83bn), and secondly it must have at least 45 million monthly end users and at least 10,000 business users established in the EU”.
Gatekeeper companies that violate the rules laid out in the DMA could risk a fine of up to 10% of their worldwide turnover for a first offence and a fine of up to 20% of worldwide turnover for repeat offences, the European Council says.
The European Commission originally proposed the legislation in December 2020 in order to ensure that large online platforms “behave in a fair way”, and the regulations will be implemented within six months of the DMA receiving final approval by both the European Parliament and Council.
It is expected that voting on final approval will take place “sometime in October”.
“With the Digital Markets Act (DMA), Europe is setting standards for how the digital economy of the future will function. It will now be up to the European Commission to implement the new rules quickly,” EU spokesperson Andreas Schwab says.
“As the European Parliament, we have made sure that the DMA will deliver tangible results immediately: consumers will get the choice to use the core services of Big Tech companies such as browsers, search engines or messaging, and all that without losing control over their data.
“Above all, the law avoids any form of overregulation for small businesses. App developers will get completely new opportunities, small businesses will get more access to business-relevant data and the online advertising market will become fairer.”
The European Commission opened a formal antitrust investigation into Apple’s practices in connection with Apple Pay in June 2020 and reports that the organisation is preparing to file an antitrust charge against the company emerged in October 2021.
New EU law to force Apple to open up its NFC chip? was written by Tom Phillips and published by NFCW.