European officials have reached agreement on a sweeping set of competition rules for Big Tech that could mark a global turning point for technology regulation.
The proposed framework, known as the Digital Markets Act, could label large companies such as Facebook-parent Meta or Google as “gatekeepers,” and subject them to new requirements and prohibitions.
For example, under the DMA, tech giants would be required to open up access to their platforms to third parties, and would be banned from giving their own products and services preference over those of competing providers. Platforms would not be able to push users toward certain apps or products simply by pre-installing them on devices and making them the default. And app stores would have to allow third-party payment systems, rather than requiring app developers to use the platform owner’s systems.
During negotiations late Thursday, European lawmakers also agreed that large online messaging services such as WhatsApp and iMessage will have to be compatible with other messaging providers. The change could enable users to send messages across different platforms — a major departure from how those services currently operate.
Repeat violations of the DMA could result in fines of up to 20% of a company’s global revenue, according to a release.
The new rules must still be finalized. But they are expected to take effect in October, said Margrethe Vestager, European Commission executive vice president, in a press conference.
“Large gatekeeper platforms have prevented businesses and consumers from the benefits of competitive digital markets,” Vestager said in a statement. “The gatekeepers will now have to comply with a well-defined set of obligations and prohibitions. This regulation, together with strong competition law enforcement, will bring fairer conditions to consumers and businesses for many digital services across the EU.”
Providers subject to the law will have to comply with its requirements within six months of being designated as a gatekeeper.
To be considered a gatekeeper, a platform must be a “core platform service” such as a social media or a search engine provider, or an app store or digital marketplace operator. The category also covers web browsers, voice assistants and cloud services, according to a release. Gatekeepers would also have to have at least 45 million monthly EU users and 10,000 yearly business users, and revenues within the EU of at least 7.5 billion euros or a market cap of at least 75 billion euros.
The coming rules were the subject of intense lobbying by Silicon Valley giants.
In a statement, Apple (AAPL) said it is concerned that parts of the DMA could result in weakened privacy and security for users, “while others will prohibit us from charging for intellectual property in which we invest a great deal.”
Google (GOOG) said in a statement that the agreement on the DMA will have “significant impact.”
“While we support many of the DMA’s ambitions around consumer choice and interoperability, we remain concerned that some of the rules could reduce innovation and the choice available to Europeans,” Google said. “Our goal at all times will be to continue to offer the best product experiences to our European users.”
The landmark agreement highlights the growing movement by policymakers worldwide to rein in tech platforms, said Vestager.
“This is a global movement and I think that is really good,” she said. “The more we can inspire one another to get enforcement and make sure digital markets are fair, open and contestable, the better.”
Rishi Iyengar contributed to this report.