The European Union secured agreement on the detail of a major competition reform that will see the most powerful, intermediating tech platforms subject to a set of up-front rules on how they can and cannot operate.
The Digital Markets Act (DMA) will apply to large companies providing core platform services after eight hours of discussions between the European Council, parliament and Commission.
To be considered agatekeepers, companies must have at least 45 million monthly end users in the EU and 10,000+ annual business users.
The scope of the US tech giants is clear. While some smaller but still large European tech platforms are subject to the regime, such as the music streaming platform Spotify, it looks like they will not be. The scale to fall in scope may be gained by other European platforms.
The purpose of the DMA is to take aim at big tech, so it's not uncommon for SMEs to be excluded from being designated.
The regulation has been in the works for years and is set to change the way tech platforms are regulated, in contrast to the way antitrust enforcement has been done in the past.
Frustration with flagship EU competition investigations and enforcements against tech giants like Google and widespread concern over the need to restart tipped digital markets have been core driving forces for the bloc's lawmakers.
The agreement will lead to a new era of tech regulation worldwide, said the European Parliament's Rapporteur for the file. The Digital Markets Act puts an end to the dominance of Big Tech companies. They need to show that they allow fair competition on the internet. New rules will help enforce that principle. Europe is making it easier for users to choose.
The European Union has had to impose record fines over the past 10 years for certain harmful business practices by very large digital players. The DMA will ban these practices and create a more competitive economic space for European businesses. These rules are key to stimulating and unlocking digital markets, enhancing consumer choice, enabling better value sharing in the digital economy and boosting innovation. The European Union is the first to take such decisive action and I hope that others will do the same soon.
Smaller messaging platforms will be able to request that dominant services open up on request and enable their users to be able to exchange messages, send files or make video calls across messaging under the EU's key requirements.
It could be significant for consumers who object to the policies of a giant like Meta, which owns Facebook Messenger and WhatsApp, but feel unable to switch to a rival since their social graph is held by the gatekeeper to actually leave without having to give up the ability to message their friends.
There was a debate about whether messaging interoperability would survive the trilogues. Group messaging interoperability is set to be phased in over a longer period than one-to-one messaging.
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Ahead of today's fourth and final trilogue, Schwab emphasized the importance of messaging interoperability provisions.
He told us that the Parliament has always been clear that interoperability for messaging has to come. If the Telecoms Regulators say it is not possible to deliver end-to-end group chats within the next nine months, then it will come as soon as possible.
Messenger services that are subject to the interoperability requirement will have to open up their APIs for competitors to provide interoperability messaging for basic features, meaning that smaller messaging services that are not in the scope of the DMA will not be required.
The first basic messaging features will be user-to- user messages, video and voice calls, as well as basic file transfer (photos, videos), and then over time, more features such as group chats will come.
Interoperability for social media services has been put on ice for now, with the EU co-legislators agreeing that such provisions will be assessed in the future.
An amendment to an earlier version of the proposal means that explicit consent from users will be required to combine personal data for targeted advertising.
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Data combination and cross use can only be done with explicit consent. This means more control for users whether they want to be tracked across devices/ services, even outside of the networks of Big Tech, and whether they want to receive tracking ads.
Parliament will limit the number of times Gatekeepers can ask for consent if you refuse it or withdraw it. This has been very important to me, otherwise, consent would be meaningless if the gatekeeper could just bombard users with junk mail.
Users should be able to freely choose their browser, virtual assistants or search engines when such a service is operated by a gatekeeper, meaning choice screens, not pre-selected defaults, will be the new norm.
Although email is often bundled with another choice, it does not appear to have been included with lawmakers narrowing this down.
The agreed text includes requirements on gatekeepers.
Among the restrictions are things that can't be done by people.
The Commission will be solely responsible for the enforcement of the DMA, and it will have some latitude over whether to immediately crack down on tech giants, with the text allowing the possibility of engaging in regulatory dialogue to ensure they have a clear understanding of the rules.
Today's agreement on a provisional text of the DMA is almost the last milestone on a multi-year journey towards the proposal becoming law. European lawmakers still have a few hoops to jump through.
Getting consensus agreement in the first place is typically the harder part, but it is still pending approval of the finalized legal text by the Parliament and Council. After the final vote, the text will be published in the EU's official journey, and the regulation will come into force 20 days later, with six months allowed for Member States to implement it.
EU Commissioners will be holding a series of briefings tomorrow to flesh out the details of what has been agreed.
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