In the past week, two big events shook the Big Techs in the European Industry.
The European Union had issued the non-compliance investigation against Apple, Meta and Google’s parent company Alphabet for following anti-competitive practices in serving their tools, throttling competition. The EU did not stop there as shortly after it, it asked Big Techs to identify Deepfakes in light of the challenges prompted by Artificial intelligence (AI), ahead of its June Elections.
These are only the two recent instances from the long-list of restrictions/notices/investigations being put by EU on Big Techs since the passing of its critical and much controversial regulation of Digital Markets Act (DMA) in the past year. These two recent issues are also under the jurisdiction of DMS only, underlining the significance and the major repercussions this act can have on Big Techs.
The DMA rules are to remove market barriers created by large gatekeeper tech companies like Google, Facebook, and Amazon. This is a strategy applied by the EU to level up the playing field for digital companies of all sizes and enhance customer choice.
This article aims to explore the DMA rules and how is it going to affect the giant tech firms. It will also analyse these two recent cases where EU has used DMS to regulate the two challenges posed by Big Tech.
DMA : Law passed by EU to regulate Digital markets and it’s players
The Digital Markets Act is the European Union’s law to make the markets in the digital sector more fairer, impartial and debatable. The DMA was published in the office Journal of the European Union on October 2022 and entered into force on November 2022. The DMA establishes a set of clearly defined objective criteria to identify “gatekeepers”.
Gatekeepers are the large digital platforms providing basic important services like online search engines, app stores, messenger services. These gatekeepers are bound to comply with the do’s ( i.e. the obligations) and don’ts (i.e. prohibition) listed in DMA. (Refer the graphics to know in detail)
Jurisdiction of DMS
The rules apply to companies with an annual turnover of more than $7.9 billion, a market value above $79 billion and services with an active user base of 45 million monthly in the EU. Big tech companies like Apple, Microsoft, Amazon, Google and Meta-which owns Facebook, WhatsApp and Instagram -and China’s Byte Dance, the owner of TikTok will have to adhere to the rules.
According to the reports, Apple and Microsoft are seeking exemptions for some of their services, including iMessages and Bing. Samsung has already successfully argued against the inclusion of its phone web browser.
Case 1: The non- compliance investigation
On March 25, 2024, the European Union opened a non-compliance investigation into Apple and other big tech companies under DMA. The investigation will focus on iPhone maker’s rules on steering in the App stores and the choice screen for its default web browser, Safari.
The Commission is concerned that Apple is making it hard for app developers to tell users about offers outside the App Store. Furthermore the commission will also investigate if Apple is making it difficult for iPhone users to remove apps, change default settings, or choose different default apps like browsers or search engines.
According to the EU’s Press Release, the non compliance investigations under the Digital Markets Act are into Alphabet’s rule on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari and Meta’s “pay or contest model”.
The EU’s statement further reads that Commission is worried that Alphabet’s and Apple’s measures may not be fully compliant as they have certain limitations and restrictions.
According to DMA, if a company fails to follow the DMA, they could be fined upto 10% of the company’s total worldwide annual turnover, or upto 20% in the event of repeated infringements. There could be periodic penalty of upto 5% of the average daily turnover.
Part 2: To criminalize Deep fake AI porn
On March 29th, 2024, EU asked the major social media platforms to assess and mitigate specific risks associated with AI by clearly labelling “content generated by AI” so that viewers would be well informed in advance about it otherwise it would known as Deepfake.
Under the Digital Markets Act, the EU’s landmark AI legislation approved by the lawmakers, it can govern AI content provided by the popular social media platforms like Snapchat, Instagram, YouTube, X(formerly known as Twitter).
Future impact on the giant tech industries and the end-users
The anticipated impact on the big tech firms is the challenging atmosphere that they have been put now by EU through the DMA. It would be interesting to see how these giant industries keeping in mind the DMA rules and regulations are able to manage and prevent the Cyber Ai attacks whilst providing the best possible user experience.
