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The EU just pummeled Big Tech again: Here are the newest rules
- The EU just passed the Digital Services Act and Digital Markets Act.
- Both acts focus on reigning in Big Tech’s power while simultaneously giving more power to the consumer.
- Among other changes, the Services Act could bring interoperability to messaging apps.
When it comes to keeping Big Tech in check, the European Union does most of the heavy lifting. Recently, the EU forced Apple’s hand in adopting USB-C on iPhones, and the protections we have under the General Data Protection Regulation (GDPR) are all thanks to the EU.
Today, the EU slammed down two more measures: the Digital Services Act and Digital Markets Act. Both acts are directed specifically toward huge tech firms, such as Google, Apple, Amazon, and Microsoft. Although the acts differ slightly, they both focus on stripping power from Big Tech and giving it back to the general consumer.
Here’s the gist of each measure.
Digital Markets Act
This act is all about preventing huge firms from abusing just how huge they are. As an example, Google was caught giving its own shopping platform preference in Google Search when compared to other third-party services. The Digital Markets Act would make that punishable by heavy fines.
The DMA also mandates large firms work better with smaller firms. Theoretically, depending on how lawyers interpret these bills, this could mean interoperability between chat services. For example, this could force Apple to make iMessage work with Facebook Messenger. However, the language here is somewhat vague, so it’s unclear how seriously companies would need to take that.
Finally, the DMA also allows third-party platforms to bypass larger platforms when communicating with users. As an example of how this could be beneficial, imagine you are using an Android app downloaded through the Google Play Store. If the developer of that app wants to try to sell you something, the dev could reach out to you directly, rather than be forced to go through Google.
Digital Services Act
The Digital Services Act is mostly focused on large firms with social networks or social aspects to their products. In one area, the DSA pushes companies to be more aggressive with content moderation, including stemming the flow of misinformation.
Elsewhere, the DSA requires companies to prevent the sale of illegal or unsafe products on their respective platforms.
The Digital Services Act also gives more power to the people. It prevents companies from using sensitive personal information for ad-tracking purposes. It also prevents the ad-tracking of children. You will also get to find out why an algorithm delivered you a certain advertisement as well as reasonably contest it if an algorithm removes a piece of content you created.
When and how will these be enforced?
The Digital Markets Act and Digital Services Act will begin to be enforced by the EU in 2024. Should regulators discover a firm is not complying with these acts after that time, it could levy huge fines in the sum of up to 10% of a company’s worldwide revenue from the prior year. Google’s revenue in 2021 was $257 billion, so a fine from these acts would be as high as $25 billion. That’s something Google, Apple, and other Big Tech players can’t ignore.