23rd Mar 2023

Progress on new rules brings EU 'closer to a fair tech market'

  • MEPs increased the fines a tech gatekeeper can face when found in breach of the rules - to up to 20 percent of its total worldwide turnover (Photo: Rami Al-zayat)
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MEPs in the internal market committee on Tuesday (23 November) adopted its position on the Digital Market Act (DMA) – a landmark piece of legislation setting stricter rules for the so-called online 'gatekeepers', such as Amazon, Apple, Google or Facebook.

The approved text is now expected to receive wide support in the next plenary in December – paving the way for negotiations with EU governments early next year, during the French presidency of the European Council.

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The move was welcomed by EU anti-trust chief Margrethe Vestager, who said that the agreement set the EU "one step closer to a free, fair and competitive tech market where all players stand a chance to make it".

'Gatekeepers' are considered companies with at least €8bn in annual turnover in Europe and a market capitalisation of €80bn. But MEPs have extended the scope of the definition in the regulation - which will potentially affect travel site or online fashion retailer Zalando.

In their committee report, EU lawmakers placed new obligations on 'Big Tech' companies to allow people to install the operating system and app store they want – forcing Apple and Google to open up their ecosystems to third-party app stores.

They also introduced interoperability requirements between different messaging services or social networks - allowing, for example, Signal or Telegram users to talk to WhatsApp users.

However, digital activists criticised MEPs for allowing gatekeepers to undermine such interoperability by citing hardware or system integrity, data protection, and cyber security concerns – seen as a significant loophole in the legislation.

Over the last years, this has been one of the key lobbying arguments used by Apple to ensure that the its App Store is the only way to install apps on an iPhone or iPod.

Under the DMA file, the group of MEPs also put forward safeguards to protect users' personal data across different services of the same company, ensuring that, for example, someone using WhatsApp has to give consent to share their personal address book with Facebook or Instagram.

Despite the attempts from a coalition of MEPs in favour of banning behavioural tracking-based advertising outright the compromise only imposes limits to data-processing of sensitive data for these purposes.

Nevertheless, the approved text states that "personal data of minors … shall not be processed for commercial purposes, such as direct marketing, profiling and behaviourally targeted advertising".

'Dark patterns'?

EU lawmakers, meanwhile, also tried to introduce a clause to prevent the use of the so-called 'dark patterns' – seen as design tricks used to make you buy, click or sign up for things you didn't mean to, typically used by Big Tech and the tracking-ads industry.

However, according to Jan Penfrat from European Digital Rights, the current provision is too vague to prevent gatekeepers from using these tricks.

"The fight against dark patterns requires a strong, consistent and timely enforcement, something that in the context of the GDPR consent requirement has been sorely missing," he told EUobserver, referring to the EU data protection rules.

Additionally, the committee's report toughens the EU Commission's proposal and increases the fines a gatekeeper might face when found in breach of the rules - to up to 20 percent of its total worldwide turnover.

MEPs also want the EU commission to be able to temporarily halt so-called "killer acquisitions" by gatekeepers, and the creation of a new European High-Level Group of Digital Regulators to facilitate enforcement decisions between the EU executive and member states.

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