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European Union (EU) antitrust regulators are preparing for a clampdown on anti-competitive practices in the digital economy and have put the world’s big tech firms on notice. The EU today listed 22 services that fall under its Digital Markets Act, and companies including Apple (AAPL), Amazon.com (AMZN), Meta Platforms (META), Microsoft (MSFT), and Bytedance Ltd’s TikTok will have six months to adjust to the new rules or challenge them in the EU court.
The Digital Markets Act (DMA), which takes effect in March of next year, will impose a rigid regime on companies whose practices have previously resulted in billions of euros in fines and tax orders from EU regulators. It will be illegal for certain platforms to favor their own services over those of rivals. Also, firms will be barred from combining personal data across their different services, prohibited from using data they collect from third-party sources, and will have to allow users to download apps from rival platforms.
The EU’s new regulations could result in Apple iPhone users being able to download apps from rival app stores. Also, Meta Platforms would be barred from combining user data between its Facebook and Instagram platforms without obtaining permission. In addition, Google would be prohibited from favoring its own search verticals, like Shopping, in its general search results. Google and Meta Platforms said they would review today’s decision, and Microsoft said it welcomes investigation into some of its services that it described as “challenges in the market.”
Some big tech companies are concerned about being able to comply with the new EU regulations. In a recent meeting between Apple and EU regulators, Apple warned of compliance challenges with the new rules and concerns over the scope of its services to be covered and how user experiences could be safeguarded. Also, Amazon.com said it expressed concern with “overlapping and conflicting regulation coming from national competition authorities.”
Following today’s announcement of the new rules from EU regulators, companies will have six months to re-engineer their services to align with the new rules or make legal challenges against the designation decisions. EU officials are expecting their decisions to be taken to court in cases that will likely be drawn out for years. While the big tech firms may want to test the rules in court, the Bruegel think tank believes they may not have much success, saying, “Where these platforms reach the necessary thresholds to come under the scope, we don’t think they’ll have a legitimate argument.”
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
