25th Jun 2022

EU ends 'wild west' of Big Tech

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The EU adopted new rules that promise to prevent Big Tech companies like Mark Zuckerberg's Meta from abusing its market powers.

"It used to be the Wild West," Thierry Breton, the EU's internal market commissioner, told reporters on Friday (25 March). "Now, that's no longer the case. We're taking back control," he said.

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Known as the Digital Markets Act or DMA, the new rules are being billed as a new era in tech regulation.

The new rules are expected to give control back to users, who will have to provide consent for things like tracking ads. These so-called personalised ads tend to rely on large amounts of personal data and invasive surveillance practices, of which the user is rarely aware.

Proposed by the European Commission some 18 months ago, the new rules are set to come into force sometime in October and promise hefty fines for those that fail to follow it.

Big Tech firms could face fines of up to 10 percent of their annual revenues for a first offence, and up to 20 percent for a repeat infringement.

Margrethe Vestager, executive vice-president and chief of digital policy of the EU commission, said the agreement was reached in near record time.

Vestager has had a long history of challenging digital giants, including multiple cases against Amazon, Apple, Facebook and Google.

The idea behind the DMA is to stop "systemic misbehaviour" by such digital platforms, and that the commission will not have to go after them on a case by case basis.

"If there are entrenched positions, then we need regulation to come in," she said.

The DMA only applies to some of the most powerful and largest companies. It covers businesses that have an annual turnover of at least €7.5bn over the past three years and have at least 45 million monthly active users on a platform service in the EU, including web browsers and virtual assistants.

Should the firm meet those criteria, then it will be considered a so-called gatekeeper. Once officially designated as a gatekeeper by the EU, the firm will have to take extra precautions. For instance, they won't be allowed to block users from uninstalling pre-installed software or apps.

Defenders of consumers' rights across the EU have welcomed the new rules.

"This legislation is significant because it will nip Big Tech's harmful practices in the bud," said the Brussels-based European Consumer Organisation (BEUC), in a statement.

BEUC says it means Meta won't be able to combine data between its Facebook, Instagram and WhatsApp services without first asking consent from their users.

"For the first time users will be able to switch to privacy-friendly alternative messengers and still stay in touch with their contacts who stick to Whatsapp," said Patrick Breyer, a European lawmaker with the German Pirate Party, also in a statement.

MEPs to crackdown on digital 'Wild West'

MEPs will vote on new rules setting out transparency obligations for online players and holding Big Tech giants accountable. But some issues proved to be divisive after EU lawmakers tabled over a hundred amendments on the file.

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