Big Tech Braces for Potential Impact of EU Digital Markets Act

The European Union’s Digital Markets Act, applicable as of May 1, finds tech giants scrambling to anticipate regional compliance. The regulatory framework aims to ensure tech giants don’t abuse their clout by taking advantage of consumers and smaller companies. Within two months, companies providing core platform services will have to notify the European Commission and provide all relevant information. The Commission will then have two months to identify companies that fit the DMA definition of “gatekeeper.” Those that do will be subject to DMA rules and have six months to conform.

“Certain big names will very obviously hit the DMA threshold (Apple, Amazon, Google, Meta and Microsoft seem entirely safe bets for being deemed gatekeepers), but we’ll have to wait a few months to see if the full list contains any surprises,” reports TechCrunch.

“Firstly they must operate at least one ‘core platform service’ (these include online search engines, social networking services, app stores, certain messaging services, virtual assistants, web browsers, operating systems and online intermediation services),” TechCrunch writes of the gatekeeper criteria. “Secondly they must be of a large enough size and entrenched market position to fall under the regime.”

This means annual EU revenue at or above about $8.23 billion for the past three years, or an average market cap “or equivalent fair market value” of at least $82.3 billion.

Among other requirements: more than 45 million MAUs in the EU and above 10,000 yearly EU business users in the past financial year. “An entrenched and durable position is presumed if the company met the other criteria in each of the last three financial years,” TechCrunch explains, adding that “the Commission may also apply a subset of DMA rules to companies it suspects will soon become gatekeepers.”

The DMA is designed to ensure digital markets stay “open and contestable” by enforcing rules intended to curb anti-competitive behavior. Examples of DMA measures include limiting gatekeeper use of third-party data, bans on self-preferencing, interoperability requirements, and prohibitions on tracking non-consenting users for targeted ads, per the European Commission, which provides a complete list.

The big change, TechCrunch says, “is that the conditions apply up-front — so the idea is to proactively regulate digital giants that have the power to set rules on others that need to access their core platform services.”

Another major piece of EU legislation, the Digital Services Act, goes into effect later this year. The 27-nation bloc’s landmark DSA rules focus on transparency and “extra obligations for cleaning up illegal content and disinformation and keeping users safe,” writes NBC News.

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