Sept. 6 (UPI) — The European Commission Wednesday designated six tech giants as “gatekeepers” under its Digital Markets Act.
The commission identified Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft as digital gatekeepers and ordered them to ensure full compliance of their platforms under the law within six months.
“With today’s designation, we are finally reining in the economic power of six gatekeepers, giving more choice to consumers and creating new opportunities for smaller innovative tech companies, thanks for instance to interoperability, sideloading, real-time data portability and fairness,” Internal Market Commissioner Thierry Breton in a statement.
The DMA defines gatekeepers as “large digital platforms providing so-called core platform services, such as online search engines, app stores, messenger services.”
The law aims to prevent digital gatekeeper companies from treating their own services and products more favorably than similar services offered by third parties by banning companies from preventing customers from linking to businesses outside their platforms.
The DMA also bars tech companies designated as gatekeepers from tracking users outside of their “core platform service” to serve them with targeted advertisements unless users provide “effective consent.”
Gatekeepers must allow also third parties to inter-operate with their services, allow business users to access data generated on the gatekeepers platforms and provide companies advertising on their platforms with tools to independently verify ads hosted by the gatekeeper.
Within 6 months the tech companies designated as gatekeepers by the EU will have to submit detailed compliance reports outlining how they will comply with each DMA requirement.
The penalties for failing to comply include fines of up to 10% of “the company’s total worldwide turnover.” Repeated violations of the DMA can increase those fines up to 20%.
“The Digital Markets Act will help creating a level-playing field for all companies competing in the European digital market, as it will bring about more contestability and openness in markets,” Commissioner Didier Reynders said in a statement.
For systematic violations the European Commission could legally force a digital gatekeeper company to sell a business or parts of it or ban gatekeeper companies from new acquisitions of additional services related to the non-compliance.
The commission also announced four market investigations to further assess Microsoft and Apple’s submissions arguing that their core platform services don’t qualify as gateways.
Specifically, the companies argue that Microsoft’s Bing, Edge and Microsoft Advertising services aren’t gateways while Apple maintains its iMessage service doesn’t qualify as a gateway.
Under the DMA three main criteria determine gateway status for digital services.
The criteria are when the company achieves a certain “annual turnover” in the European Economic Area; provides a core platform service to more than 45 million monthly active end users and to more than 10,000 yearly active business users in the EU; and when the company met the second criterion during th last three years.
