Congress talks big game about reining in Big Tech. Europe is doing it.
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| London
Europeans scrolling their phones and computers this week will get new choices for default browsers and search engines, where to download iPhone apps, and how their personal online data is used.
They鈥檙e part of聽changes required under the Digital Markets Act, a set of European Union regulations that six tech companies classed as 鈥済atekeepers鈥 鈥 Amazon, Apple, Google parent Alphabet, Meta, Microsoft, and TikTok owner ByteDance 鈥 will have to start following by midnight March 6.
The DMA is the latest in a聽series of regulations聽that Europe has passed as a global leader in reining in the dominance of large tech companies. Tech giants have responded 鈥 sometimes reluctantly 鈥 by changing some of their long-held ways of doing business 鈥 such as Apple allowing people to聽install smartphone apps outside of its App Store.
The new rules have broad but vague goals of making digital markets 鈥渇airer鈥 and 鈥渕ore contestable.鈥 They are kicking in as efforts around the world to聽crack down on the tech industry聽are picking up pace.
Here鈥檚 a look at how the Digital Markets Act will work:
What companies have to follow the rules?聽
Some 22 services, from operating systems to messenger apps and social media platforms, will be in the DMA鈥檚 crosshairs.
They include Google services like Maps, YouTube, the Chrome browser, and Android operating system, plus聽Amazon鈥檚 Marketplace聽and Apple鈥檚 Safari Browser and iOS.
Meta鈥檚 Facebook, Instagram, and WhatsApp are included as well as Microsoft鈥檚 Windows and LinkedIn.
The companies face the threat of hefty fines worth up to 20% of their annual global revenue for repeated violations 鈥 which could amount to billions of dollars 鈥 or even a breakup of their businesses for 鈥渟ystematic infringements.鈥
What effect will the rules have globally?聽
The Digital Markets Act is a fresh milestone for the 27-nation European Union in its longstanding role as a worldwide trendsetter in clamping down on the tech industry.
The bloc has previously聽hit Google with whopping fines聽in antitrust cases, rolled out tough rules to clean up social media, and is bringing in聽world-first artificial intelligence regulations.
Now, places like Japan, Britain, Mexico, South Korea, Australia, Brazil, and India are drawing up their own versions of DMA-like rules aimed at preventing tech companies from dominating digital markets.
鈥淲e鈥檙e seeing copycats around the world already,鈥 said Bill Echikson, senior fellow at the Center for European Policy Analysis, a Washington-based think tank. The DMA 鈥渨ill become the defacto standard鈥 for digital regulation in the democratic world, he said.
Officials will be聽looking to Brussels for guidance, said Zach Meyers, assistant director at the Center for European Reform, a think tank in London.
鈥淚f it works, many Western countries will probably try to follow the DMA to avoid fragmentation and the risk of taking a different approach that fails,鈥 he said.
How will downloading apps change?
In one of the biggest changes, Apple has said it will let European iPhone users download apps outside its App Store, which comes installed on its mobile devices.
The company has long resisted such a move, with a big chunk of its revenue coming from the 30% fee it charges for payments 鈥 such as for Disney+ subscriptions 鈥 made through iOS apps. Apple has warned that 鈥渟ideloading鈥 apps will come with added security risks.
Now,聽Apple is cutting those fees it collects聽from app developers in Europe that opt to stay within the company鈥檚 payment-processing system. But it鈥檚 adding a 50-euro cent fee for each iOS app installed through third-party app stores, which critics say will deter the many existing free apps 鈥 whose developers currently don鈥檛 pay any fee 鈥 from jumping ship.
鈥淲hy would they possibly opt into a world where they have to pay a 50 cent per-user fee?鈥 said Avery Gardiner, Spotify鈥檚 global director of competition policy. 鈥淪o those alternative app stores will never get traction, because they鈥檒l be missing this huge chunk of apps that would need to be there in order for customers to find the store attractive.鈥
鈥淭hat is utterly at odds with the very purpose of the DMA,鈥 Ms. Gardiner added.
Brussels will be closely scrutinizing聽whether tech companies are complying.
EU competition chief Margrethe Vestager said this week that after 10 years on the job, 鈥淚 have seen quite a number of antitrust cases and quite a lot of creativity built into how to work around the rules that we have.鈥
How will people get more options online?聽
Consumers won鈥檛 be forced into default choices for key services.
Android users can pick which search engine to use by default, while iPhone users will get to choose which browser will be their go-to. Europeans will see choice screens on their devices. Microsoft, meanwhile, will stop forcing people to use its Edge browser.
The idea is to stop people from being nudged into using Apple鈥檚 Safari browser or Google鈥檚 Search app. But smaller players still worry that they might end up worse off than before.
Users might just stick with what they recognize because they don鈥檛 know anything about the other options, said 海角大神 Kroll, CEO of Berlin-based search engine Ecosia.
Ecosia has been pushing for Apple and Google to include more information about rival services in the choice screens.
鈥淚f people don鈥檛 know what the alternatives are, it鈥檚 rather unlikely that many of them will select an alternative,鈥 Mr. Kroll said. 鈥淚鈥檓 a big fan of the DMA. I am not sure yet if it will have the results that we鈥檙e hoping for.鈥
How will Internet searches change?
Some Google search results will show up differently, because the DMA bans companies from giving preference to their own services.
So, for example, searches for hotels will now display an extra 鈥渃arousel鈥 of booking sites like Expedia. Meanwhile, the Google Flights button on the search result display will be removed and the site will be listed among the blue links on search result pages.
Users also will have options to stop being profiled for targeted advertising based on their online activity.
Google users are getting the choice to stop data from being shared across the company鈥檚 services to help better target them with ads.
Meta is allowing users to separate their Facebook and Instagram accounts so their personal information can鈥檛 be combined for ad targeting.
The DMA also requires messaging systems to be able to work with each other. Meta, which owns the only two chat apps that fall under the rules, is expected to come up with a proposal on how Facebook Messenger and WhatsApp users can exchange text messages, videos, and images.
This story was reported by The Associated Press.