EU cracks down on six Big Tech giants

LONDON: The European Union (EU) has launched a digital crackdown to curb the dominance of big tech giants including Apple, Amazon, Microsoft, Google’s parent company Alphabet, Meta (formerly Facebook), and ByteDance, the parent company of TikTok.

As per media reports, the six companies were designated as online “gatekeepers” and were subjected to strict scrutiny as per the Digital Markets Act in the 27-nation bloc.

The Digital Markets Act outlines a series of regulations intended to prevent tech giants from monopolising digital markets. It comes with the threat of substantial fines and the potential requirement for major tech companies to dispose of certain parts of their businesses to continue operations in Europe.

However, the legislative action is part of a comprehensive update to the EU’s digital regulations, which began taking effect this year. It follows closely behind a companion set of rules, the Digital Services Act, aimed at enhancing internet user safety.

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Meanwhile, European Commissioner Thierry Breton, responsible for the EU’s digital policy, stated, “The most impactful online companies will now have to play by our EU rules. DMA means more choice for consumers, fewer obstacles for smaller competitors, and opening the gates to the internet.”

The reports said that the European Commission defines digital platforms as gatekeepers if they serve as crucial intermediaries between businesses and consumers by providing “core platform services.” Examples include Google’s Chrome browser, Microsoft’s Windows operating systems, chat apps like Meta’s WhatsApp, social networks like TikTok, and platforms that act as intermediaries, such as Amazon’s Marketplace and Apple’s App Store.

The reports indicated that these companies were given six months to comply with the Digital Markets Act’s requirements, prompting changes in how Big Tech operates. Google acknowledged that it and other companies will need to make various adjustments to their products and services in response to the new law.

Furthermore, one of the primary objectives of the legislation was to dismantle “closed environments” that limit users’ ability to choose alternatives. For instance, tech companies were prohibited from preventing consumers from connecting with businesses outside their platforms, potentially influencing Apple to further open its App Store.

Platforms are also prohibited from favouring their own products or services over competitors in search results, and they can’t aggregate user data for targeted advertising without clear consent.

Moreover, the act ensures that essential software or apps, like web browsers, are not installed by default along with operating systems. Consumers will be presented with a choice screen for search engines and browsers.

Companies found in violation of the regulations may face fines of up to 10 per cent of their annual global revenue, with repeat offenders subject to fines of up to 20 per cent, or even potential breakup.