EU could introduce new laws to rein in the dominance of big tech companies
In the last decade, big tech companies have dominated the market in most parts of the world. However, new laws designed to open up the sector could come into force in the EU soon.
Meta, Alphabet, Amazon, Apple, and Microsoft are currently the leaders in the digital industry. Collectively, these five companies earned an income of about $197 billion on revenue of more than $1 trillion in 2020.
Furthermore, at the moment, over 50% of global online ad spending goes through Meta or Alphabet and Google has a share of over 90% in Europe.
But, these companies could lose some of their current advantages in the EU. Under the Digital Markets Act (DMA), they could soon be made to open up their services to other developers.
The act will change the rules large tech companies have to follow. For example, messaging apps could be required to work with smaller rival apps in the future. Smaller apps will be able to ask the big tech “gatekeepers” to let users send and receive messages via their platforms.
Another change under the DMA is that Google would no longer be able to promote its own job, travel, or local service over its rivals in search results. Additionally, companies would no longer be able to force users to use their own payment service, such as Apple Pay.
Although larger companies won’t need to make these changes immediately, they have expressed some concerns over the effects it could have on innovation and security.
But, in a video, the EU has described the DMA as “a landmark law for the EU’s digital transformation.” It also said, “This legislation will rebalance digital markets, increase consumer choice and put an end to many of the worst practices that big tech has engaged in over the years”.
Member states will need to give the Commission the resources it needs to enforce the new rules, but if successful, the DMA will start to be implemented in the next six months.