Latest EU Legislation Targets Major Tech Companies

Latest EU Legislation Targets Major Tech Companies

The Digital Markets Act aims to create an even playing field by enforcing a number of new rules in the social media industry.

The European Parliament are set to introduce a new legislation which will shake things up for the tech giants, in order to level the competition between them and the smaller companies.

The Digital Markets Act (DMA), which has yet to be approved, will force companies such as Facebook and Google – who are described as ‘gatekeepers’ in the legislation – to “interoperate with smaller platforms, if they so request.”

The gatekeeper category is used to describe all those companies who have a net worth of at least 75 billion euros (about AU$110 billion), a minimum of 45,000 active users and a platform such as Facebook or Twitter.

Apart from interoperability, the DMA also has a number of other requirements from the big tech firms, such as providing the ability to users to uninstall their software from their devices so they can make a free choice about the apps they want to use, not using their own platforms to promote themselves (for example with Facebook adds on Facebook news feeds) and providing access to businesses who advertise with them to use their data.

There have been many times in the past when other organisations or governments have attempted to clamp down on the big tech corporations by inducing heavy fines to any who broke the rules. But the difference with the DMA is that, the penalty for all violators is already heavy enough (10 percent of their annual revenue,) but for repeat offenders, the implications could be much worse than a simple fine.

“The fines will increase if you do not implement changes. Eventually, in the toolbox, there’s also the tool that you can actually break up a company if no change is happening, or if you are a repeat offender,” EU commissioner for competition Margrethe Vestager said when speaking to The Verge.

The proposed legislation caused many reactions by the firms themselves, who have pointed out that it could stifle innovation and create unnecessary complications towards consumers. There were also complaints by US legislators who wrote an official letter to the president of the US, Joe Biden, claiming that the new act “…unfairly targets American workers by deeming certain U.S. technology companies as ‘gatekeepers’ based on deliberately discriminatory and subjective thresholds.”

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