Eu Restraints Hit Apple, Meta, Bytedance

The European Union made a significant move on Wednesday by disclosing the list of digital powerhouses, such as Apple, Meta (the parent company of Facebook), and ByteDance (the parent company of TikTok), that will face rigorous new restrictions on their business practices. This development is part of Brussels' ongoing efforts to implement more stringent regulations on major tech corporations, with the aim of safeguarding European consumers online and fostering competition in an industry dominated by American giants. This announcement marks a pivotal moment in the application of the Digital Markets Act (DMA), which is set to compel the largest tech firms to alter their practices in line with a set of prescribed do's and don'ts. Regulators anticipate that this will help create a fairer market environment. Industry observers predict that the DMA could ignite a fresh battlefront between digital giants and the European Union, potentially leading some companies to pursue legal challenges against the new regulations. The European Commission, the EU's influential antitrust body, identified 22 "core platform" services belonging to five major US tech corporations classified as "gatekeepers." These gatekeepers include Google's parent company, Alphabet, Amazon, Apple, Meta (formerly Facebook), Microsoft, and China's ByteDance. The list of services designated for stringent compliance includes Apple's App Store, Meta's Facebook, Instagram, and WhatsApp, Google's YouTube video platform and Chrome browser, as well as Apple's Safari. Additionally, it encompasses operating systems operated by Apple, Microsoft, and Google, along with Alphabet's Google Maps, Play, and Shopping. These companies are required to achieve full compliance with the DMA by March 6, 2024. The "gatekeeper" status is conferred when a service boasts more than 45 million monthly active users and over 10,000 yearly active business users within the EU. Apple responded to the development by expressing deep concern over the privacy and data security risks posed by the DMA for its users. The tech giant pledged to work toward mitigating these impacts. The DMA introduces substantial fines, amounting to up to 10 percent of a firm's global revenues, for violations of some of the most serious competition rules. Repeat offenders may face fines of up to 20 percent of their global revenues. One significant change ushered in by the DMA is the requirement for interoperability between messaging apps, making it easier for users to share links and images across platforms. Thierry Breton, the EU's top tech enforcer and industry commissioner, remarked, "With today's designation, we are finally reining in the economic power of six gatekeepers, giving more choice to consumers and creating new opportunities for smaller innovative tech companies." Apple and Microsoft contested the classification of certain parts of their businesses as "core" services. The European Commission responded by initiating investigations into Apple's claims regarding iMessage and Microsoft's claims regarding Bing, Edge, and its advertising platform. A Microsoft spokesperson welcomed the decision to investigate these three services, asserting that they operate as challengers in the market. Meanwhile, Apple expressed its readiness to explain to the commission why iMessage should be considered outside the scope of the DMA. The EU has emerged as a global leader in taking on big tech, with the DMA and its counterpart, the Digital Services Act (DSA), providing the European Commission with more robust tools to address the behavior of tech giants that have, critics argue, operated unchecked to the detriment of users. One of the primary goals of the DMA is to prevent larger players from stifling the growth of smaller companies that could pose competition by acquiring them through takeovers. Past examples of such acquisitions include Facebook's purchases of Instagram and WhatsApp, as well as Google's acquisition of YouTube and Waze. Under the DMA, companies must notify the commission of all takeovers, regardless of size. Apple, in particular, has been the subject of numerous investigations and significant fines within the EU. The new regulations will compel the tech giant to permit alternative app stores on its products, enabling software and payments to occur outside its control. Furthermore, the commission is exploring whether Apple's iPadOS system should be designated as a "gatekeeper," even if it doesn't meet the predefined thresholds. The DMA will also prohibit companies from favoring their own services over those offered by competitors and will mandate the sharing of key information with business customers.