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The EU approved a landmark law for tight control of IT giants. It will radically change the market

The EU approved a landmark law for tight control of IT giants.  It will radically change the market

Today, July 5, European Union lawmakers have agreed on a new package of laws designed to toughen and most ambitiously regulate the largest technology companies. The Digital Markets Act (DMA) and the Digital Services Act (DSA), first proposed by the European Commission in December 2020, have been merged into a single Digital Services Package after numerous discussions. , DSP). The law has been officially adopted by the European Parliament – now it remains only for the European Council to approve it. The entry into force is scheduled for autumn 2022.

The “Digital Services Package” is aimed at expanding control of IT giants with a large annual turnover in European countries that own services with a large audience of active users and are firmly established in the market. Eligible companies will be required by law to comply with the following requirements:

  • allow users to install applications from third-party application stores and download directly from the Internet;
  • allow developers to offer third-party payment systems in applications;
  • allow developers to integrate their applications into company platforms – for example, a messenger or a service for voice and video calls;
  • provide developers with access to any hardware features, such as “communication technologies, secure elements, proprietary coprocessors, authentication mechanisms, and software used to manage these technologies”;
  • allow users to remove all pre-installed applications and install any third-party services to replace the standard ones;
  • allow users to change the default voice assistant to any third-party option;
  • share your own product metrics with developers and competitors, including data on marketing and advertising effectiveness;
  • prohibit their products and services from being distributed in a preferential manner and ranked higher than others;
  • create an independent group to comply with EU law with an independent senior manager and appropriate authority, resources and access to management;
  • inform the European Commission about mergers and acquisitions of other companies.

Companies that disregard the rules face fines of up to 10% of total global revenue for the year, or 20% for repeated violations, as well as periodic fines of up to 5% of annual turnover worldwide. If “systematic violations” are committed, the European Commission has the power to impose additional sanctions up to the sale of a business or part of it, including divisions, assets, brand and intellectual property rights and a ban on the acquisition of other companies providing services in the digital sector.

So far, Apple has strongly resisted attempts by governments to make changes to its operating systems and services. For example, Apple simply decided to pay a $5.5 million fine every week for several months in a lawsuit in the Netherlands instead of bowing to the Consumer and Markets Authority (ACM) and allowing third-party payment systems in Dutch dating apps. Outside the European Union, the Apple ecosystem is increasingly under scrutiny, such as in the US, UK, Japan, South Korea, and elsewhere. Further cooperation between governments is expected to “split” Apple, so it looks like an unprecedented standoff is coming.

European Competition Commissioner Margrethe Vestager has set up a task force on a “digital package” that will be joined by about 80 officials. She will oversee the development of the project. At the same time, some lawmakers have called for a significant increase in the target group to better counter the power of the tech giants.

Source: Trash Box



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