5 ways the EU’s landmark digital law cracks down on Big Tech

The law contains about 20 rules that target practices by Big Tech that go against the bloc's rules on competition, but which Brussels has struggled to enforce.
25 March 2022

EU commissioner for internal market Thierry Breton delivers a speech during a debate on the Digital Markets act at the European Parliament in Strasbourg, eastern France, on December 14, 2021. (Photo by Jean-Francois Badias / POOL / AFP)

After much deliberation and contentious debate both in and out of Europe, EU lawmakers and officials have agreed on the main points of a landmark piece of legislation, known as the Digital Markets Act (DMA), a law that aims to loosen the grip held by Big Tech on vast swaths of online life.

Meeting in Brussels, the lawmakers nailed down a long list of do’s and don’ts that will single out the world’s most iconic web giants as internet “gatekeepers” subject to special rules. The “Digital Markets Act” (DMA) has sped through the bloc’s legislative procedures and is designed to protect consumers and give rivals a better chance to survive against the world’s powerful tech juggernauts.

“The agreement ushers in a new era of tech regulation worldwide,” said German MEP Andreas Schwab, who led the negotiations for the European Parliament. “The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies.”

The digital law contains about 20 rules that target practices by Big Tech that go against the bloc's rules on competition, but which Brussels has struggled to enforce

Member of the European Parliament for The European People’s Party (EPP) Andreas Schwab delivers a speech during a debate on the Digital Markets Act at the European Parliament in Strasbourg, France. (Photo by Jean-Francois Badias / POOL / AFP)

The main point of the digital law is to avert the years of procedures and court battles needed to punish Big Tech’s monopolistic behavior, where cases can end with huge fines but little change in how the giants do business.

The US tech giants have lobbied hard against the new rules and the firms have been defended in Washington, where it is alleged that the new law unfairly targets US companies. Here are five rules included in the reinforced digital law that will force the likes of Google, Apple, Meta, and Amazon to change their ways.

Digital law paves way for startups

Big tech companies make billions of dollars in profit every year and some of the windfalls go to scooping up startups and innovators. This rankles authorities, who accuse the giants of using their war chests to snuff out potential rivals before they become a threat.

Under the new rules all buyouts, no matter how small, will have to be notified to the European Commission, the EU’s executive arm based in Brussels.

Messaging unity

After multiple scandals that hit Meta-owned Facebook, many users chose to swap the giant’s Messenger or WhatsApp messaging services for alternatives, such as Signal or Telegram.

Yet the market power of Meta’s services remains strong, making it difficult for WhatsApp dissenters to keep messaging links with family and friends. To solve this, the DMA imposes interoperability between messaging apps, all while demanding that communications remain encrypted from user to user.

The digital law contains about 20 rules that target practices by Big Tech that go against the bloc's rules on competition, but which Brussels has struggled to enforce

European Commission Executive Vice-President Margrethe Vestager during a debate on the Digital Markets Act at the European Parliament. (Photo by Jean-Francois Badias / POOL / AFP)

Fair shopping on Amazon

Amazon is a major shopping platform for thousands of companies to sell their wares online. But suspicions are rife that the online giant abuses its role as a marketplace to better position its own products as a retailer.

The DMA will ban this conflict of interest, as well as demand that the gatekeepers share key information with business customers.

Digital law opens up the App Store

Around the world, Apple has strenuously defended the sanctity of its App Store, barring companies from using their own payment systems or being downloaded outside the Apple store. Despite warnings that opening up iPhones would pose a security threat, the DMA will force Apple to allow software to be downloaded and for payments to be made outside its store.

Failure to comply could carry fines in the billions of dollars — big enough even for the world’s biggest company by market value to pay attention. Any gatekeeper platform that locks in customers to use pre-installed services, such as a web browser, mapping or weather information, will also face fines.

Digital ad transparency

Google’s search engine and Meta’s Facebook and Instagram are the world’s biggest online advertisers, a status that critics say the companies abuse by accumulating valuable data about customers and keeping it to themselves.

The DMA will force the tech giants to reveal much more to advertisers and publishers on how their ads work and on an ad’s actual effectiveness. This will make companies less beholden to Google or Facebook on understanding their customers and potentially encourage firms to get their message out in new ways.