EU law threatening 'commercially painful changes' for tech out tonight

Reports suggest Digital Markets Act could hit a broader sweep of players than the FAANG gang

The European Union is to launch a legislative process that is set to enforce greater competition among the leading digital platform providers.

The lawmakers plan to rein in the dominance of big tech firms with a set of measures aimed at "gatekeeper" powers related to the services and platforms they provide.

Hotly tipped for inclusion is the power to insist large tech companies give smartphone users the ability to select their own email application and search engine. Consumers are also promised the right to uninstall applications they don't want while messaging providers such as WhatsApp, owned by Facebook parent company Meta, will be asked to ensure they have the ability to send messages to users of an entirely different messaging platform.

Set to begin today at 3pm CET (2pm GMT), the process involves a "trialogue" discussion between representatives from the directly elected European Parliament, the Council of the EU, made up of ministers from member state governments, and the European Commission, the executive branch made up of commissioners nominated by member-state governments.

Agreement of the text for the proposed legislation is expected later tonight. Proposals will be the starting point for further multi-state discussion before being ratified by the Parliament. The outcome will be a Regulation, with direct powers in member states which, rather like GDPR, doesn't require legislation at a national level.

According to the Financial Times, to qualify as a "gatekeeper" under the law, a tech firm would require at least 45,000 active users.

While giants like Google, Amazon, Facebook, Apple and Microsoft fit the criteria, smaller platform providers like Airbnb, Booking.com and Alibaba could also be included.

Christian Ahlborn, technology partner at law firm Linklaters, said: "The DMA appears to have momentum behind it, with the Council and especially the Parliament pushing, if anything, for more stringent rules than the Commission’s original proposal, and there seems to be a strong political desire to wrap it up during the French presidency of the EU.

"It is attracting unprecedented levels of attention for three main reasons: first, the rules threaten to impose commercially painful changes to the business models of almost all of the largest digital platforms; second, the rules are pretty black and white with limited scope to reduce their impact once they are in force; and, finally, the act may well set global standards for digital platforms, so its effects are likely to be felt well beyond the EU," he said.

Meanwhile, large platform companies are also set for a tighter regime in the US. The bipartisan Merger Filing Fee Modernization Act raises the fees for large mergers.

The Ending Platform Monopolies Act is set to make it unlawful for a platform with at least 500,000 monthly active US users and a value of more than $600 billion to own or operate a company deemed to represent a conflict of interest.

The Platform Competition and Opportunity Act puts the burden of proof on organizations ensuring they succeed in arguing an acquisition is lawful, as opposed to the government having to prove that it impacts competition. The Platform Anti-Monopoly Act and Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act could also affect the US tech sector. ®

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