EU Digital Markets Act promises bigger choices for users
The Digital Markets Act (DMA) from the European Union aims to restore fair play in the online world by limiting the power of large tech platforms. It targets practices that edge out competition and advantages that hurt consumers and rivals alike.
Earlier this week the European Commission named the companies in scope. Alphabet, Amazon, ByteDance, Meta and Microsoft must align with tighter rules or face penalties. The impact could reach up to 10% of global turnover for the most affected firms and cover as many as 22 services, including Instagram, YouTube, and LinkedIn.
Brussels gave these firms a grace period until March 6, 2024 to adjust. Still, most of the companies have voiced opposition, arguing the changes would force major shifts in how they run their businesses. They have mobilized legal teams and prepared for possible court actions. “A lawsuit seems likely,” remarked Gerard de Graaf, the European Commission’s ambassador to Europe, highlighting Silicon Valley as the home base of many affected firms.
User Enhancements
Beyond social networks, the DMA will reshape several sectors in the digital economy. Web browsers, search engines, online marketplaces, streaming services, and both desktop and mobile operating systems will feel the effects. The commissioner overseeing the internal market says these changes will give consumers more options.
Here are the key shifts that may affect everyday users.
More choices for consumers
From March onward, consumers can expect a wider array of services. The DMA targets situations where a few large firms rely on their own services or those of partners in ways that block fair competition. A familiar example is the search engine default setting on devices, which many users simply cannot change. The goal is to empower people to switch or uninstall preinstalled apps more easily.
Respecting consent and privacy
A central pillar of the DMA is to curb invasive tracking and data collection for advertising. Firms will be required to obtain clear consent from users before collecting data for targeted ads. This marks a shift from voluntary practices to enforceable rules. For very large platforms, sharing user data across affiliated services will also be restricted.
Interoperability and openness
Interoperability means different systems can exchange information and work together. The DMA aims to enable gadgets and software to interoperate more freely. In practice, this could let users send messages across platforms that today do not communicate with each other. While broad compatibility is welcome, some experts worry about potential risks to encryption in messaging apps, as openness evolves.
Interoperability has been emerging in various services for years, and the new rules would extend this approach further. The outcome could be more flexible and convenient use of multiple services across devices and ecosystems.
Fairer pricing and competition
Proponents say reducing concentrated power among a few players will spur innovation, improve service quality, and lead to fairer prices for consumers. The Commission believes stronger competition will eventually benefit users in North America and beyond, though exact pricing impacts depend on market dynamics and how firms implement the new obligations.