Law may also force companies like Google and Apple to allow alternatives to their app stores
The European Union member countries reached an agreement March 24, 2022 on a landmark bill that will tighten their grip on the biggest tech companies dominating the online marketplace.
The new law, called the Digital Markets Act (DMA), will potentially reshape app stores, online advertising, e-commerce, messaging services and other everyday digital tools by introducing drastic changes in the way technology goliaths do their business.
So what does the new law mean? Practically, companies like Google LLC and Amazon.com Inc will no longer be able to collect data from different services to offer targeted ads without users’ consent.
The law may also force companies like Google and Apple to allow alternatives to their app stores. DMA aims to blacklist certain practices used by large platforms acting as ‘gatekeepers‘ and enable the commission to carry out market investigations and sanction non-compliant behaviour.
Gatekeeper is the new category the EU is using to define any firm with a market capitalisation of at least 75 billion euros and have 45 million monthly users. These include Amazon, Apple, Meta and Google.
The new changes will allow customers to exchange messages between services, send files, make video calls and choose their own virtual assistants, EU said. Europe’s new rules could offer a preview of what’s to come elsewhere in the world.
The region’s online privacy law, the General Data Protection Regulation, has served as a model for countries such as Japan and Brazil. The use of payment services by developers has been a complex issue in India as well.
If a company refuses to abide by the new rules, the EU is free to impose fines of up to 10 per cent of the company's total worldwide turnover. The legislation has not been passed yet but the EU is confident that DMA will come into effect "sometime during October 2022".
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