EU approves landmark bill to regulate Apple, other big tech companies

The European Parliament formally adopted the Digital Markets Act (hereinafter referred to as “DMA”) and the Digital Services Act (hereinafter referred to as “DSA”) proposed by the European Commission in December 2020, integrating them into a “Digital Services Package Act” ” (Digital Services Package) in an attempt to solve the so-called “gatekeeper” problem of large tech companies.

Given the size of Apple ‘s annual turnover in the EU, combined with the fact that the company owns and operates a platform that attracts a large number of active users, Apple will almost certainly be classified as a “gatekeeper” and therefore subject to the rules of the DMA Act. Under the bill, “gatekeepers” large tech companies must:

– Allow users to install apps from third-party app stores and sideload directly from the internet;

– Allowing developers to provide third-party payment systems within the app and promote offers outside of the Gatekeeper’s platform;

– Allowing developers to integrate their apps and digital services directly with those that are “gatekeepers”, including allowing messaging, voice calling and video calling services to interoperate with third-party services;

– Allows developers to obtain any hardware capabilities, such as “near field communication technologies, secure elements and processors, authentication mechanisms, and software used to control these technologies”, etc.;

– Ensure that all applications are uninstallable and allow users to unsubscribe from core platform services under similar conditions to subscriptions;

– Allow users to choose to change the default voice assistant service to a third-party option;

– Share data and metrics with developers and competitors, including marketing and advertising performance data;

– establish an independent “Compliance Function” group, with an independent senior manager to monitor compliance with EU law, with adequate powers, resources and management authority;

– Notify the European Commission of mergers and acquisitions.

At the same time, the DMA bill also seeks to ensure that “gatekeeper” tech companies can no longer do the following:

– Certain software applications cannot be pre-installed and require users to use any important default software services, such as web browsers;

– cannot require app developers to use certain services or frameworks (including browser engines, payment systems, identity providers, etc.) to list their products in the app store;

– Do not give preferential treatment to or rank your own products, applications or services higher than those developed by other developers;

– Personal data collected through one service cannot be reused for another service;

– Do not create unfair conditions for corporate users.

In addition, the DSA Act, also approved by the European Parliament, requires that “gatekeeper” platforms must do more to police illegal content on the Internet.

According to the provisions of the DMA Act, violating companies will face a fine of up to 10% of the total global turnover; if repeated violations, they will face a fine of up to 10% of the total global turnover, plus a maximum of 10% of the total global turnover. 5% periodic fine. In addition, the European Commission will be able to impose additional sanctions on a “gatekeeper” company if there is “systematic infringement”, such as forcing it to sell a business or part of its business (including units, assets, intellectual property or brands), or “Gatekeeper” companies are prohibited from acquiring any company that provides services in the digital space, etc.

Apple has so far resisted attempts by governments to make changes to its operating system and services. Apple, for example, would rather choose to pay $5.5 million a week in fines in the Netherlands for several months rather than obey an order from the country’s Authority for Consumers and Markets (ACM) to allow the use of third parties on Dutch dating apps payment system.

EU antitrust commissioner Margrethe Vestager has set up a DMA task force that is expected to be joined by around 80 officials, but some lawmakers have called for a larger task force, to counter the power of Big Tech.

Now, the Digital Services Package only needs to be passed by the European Council to come into force in the autumn.

Outside the European Union, Apple’s ecosystem is also increasingly coming under increasing scrutiny from governments around the world, including the US, UK, Japan, South Korea and more.

There is clear interest from global regulators to explore requirements around application sideloading and interoperability, and governments around the world are expected to collaborate further on this issue. Experts expect a “brutal battle” between Apple and global regulators.

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