The EU's Digital Markets Act is forcing tech giants to change. But is it enough?
Last September, Alphabet, Amazon, Apple, Meta, Microsoft and ByteDance were given six months to comply with the EU's new Digital Markets Act (DMA). The deadline is Wednesday night, and while the tech giants have made changes, they may not be enough to break their monopolies.
The EU introduced the Digital Markets Act in an attempt to curb the power of six major tech companies. These companies are seen as "gatekeepers" whose size gives them a key position in the digital marketplace. Smaller companies depend on them, and it is difficult or impossible for consumers to bypass their services.
That is why the EU is forcing the tech giants to make significant changes to the way they operate in Europe. For example, Meta now allows EU citizens to separate their Facebook and Messenger accounts. Apple users, meanwhile, will no longer have to use the App Store to download apps and will be able to use browsers that are not based on Apple's own Safari.
Alphabet is the company most affected by the new rules: its various Google services, Chrome, YouTube, Android and its advertising system are all seen as monopolistic. Amazon's online marketplace and advertising business, Microsoft's Windows operating system and ByteDance's social media platform TikTok are also affected by the DMA.
Unworkable changes?
The DMA is designed to promote competition and break the stranglehold these tech companies have on the digital economy. But some experts don't believe it will change the digital landscape in any meaningful way. The tech giants have made changes that in theory comply with the DMA, but in practice are unworkable for smaller companies.
For example, on apps that reach one million downloads in a third-party app store, Apple will impose a €0.50 'Core Technology Fee' for each first annual install per year. This means that, if Meta were to put Instagram on another app store, it would have to pay Apple $135 million every year. If a company wants to avoid this fee, its only option is to host the app exclusively on Apple's own App Store.
"If the EU Commission lets this pass, the DMA will be lost"
"Under Apple's current proposal, it seems unlikely that anyone would even try to challenge the gatekeeper's monopoly. It's just not worth it," Jan Penfrat, senior policy advisor at European Digital Rights (EDRi), tells The Verge. "If the EU Commission lets this pass, the DMA will be lost."
Apple did make some concessions to its European user base ahead of the 7 March deadline. But at the time of writing, the Core Technology Fee is still being enforced.
From Thursday, the EU will assess the changes made by the six 'gatekeepers' on the basis of their compliance reports. EU industry chief Thierry Breton told Reuters in January that "if the proposed solutions are not good enough, we will not hesitate to take strong action".
PHOTO: © Andre M. Chang/ZUMA Press Wire