Share this article

The Digital Markets Act (DMA), effective from Thursday, marks a significant shift in competition law, targeting major internet players like Google, Amazon, Apple, ByteDance, Meta, and Microsoft.

The European Union’s new legal arsenal, which takes effect on Thursday, promises to clamp down harder and faster on abuses of power by the world’s largest internet businesses.

The Digital Markets Act (DMA) represents a watershed moment in competition law, having the potential to change how the world’s largest players behave online.

Its entire impact may not be realized immediately, but from Thursday, six so-called “gatekeepers” will face stricter restrictions: Google parent Alphabet, Amazon, Apple, TikTok owner ByteDance, Meta, and Microsoft.Drawing on the experience of years of drawn-out legal challenges attempting — sometimes unsuccessfully — to curb anti-competitive conduct by IT titans, the EU appears to have finally equipped itself with the authority to bring businesses to heel.

The DMA maintains a list of do’s and don’ts for businesses to ensure a level playing field. For example, rather of pushing a default option, provide users more options when selecting a web browser for their devices.

Google, for example, will be prohibited from promoting its platforms, such as Google Shopping, in search engine results.

Meanwhile, Apple must allow iPhone customers to download other software stores from its software Store, as well as payment methods that compete with Apple Pay.

Given how quickly these markets evolve and how long traditional competition procedures take, it was critical to have the capacity to act early, rather than after the damage has been done,” said Romain Rard, a lawyer at Gide Law Firm in Brussels.

Mockery’ by Apple

The six IT titans have announced a slew of adjustments since being targeted by the commission, the EU’s strong anti-trust regulator, in September, giving them time to prepare.

But for Rard, it’s too early to draw any judgments.

“Is this minimum compliance without any real change in the companies’ behaviour, and if this is the case, how far will the commission be prepared to go in applying the DMA and its highest sanctions?” he said.

On Friday, 34 digital enterprises and organizations urged the commission to crack down on Apple, claiming that its proposed revisions to comply with the DMA “make a mockery” of the legislation.

What is certain is that the new law offers the EU more instruments for ensuring enforcement.

Currently, corporations who violate competition legislation face fines of up to 10% of their global turnover. This can increase to 20% for repeat offenders under the DMA.

Strengthened powers

The new rules are based on the EU’s past experiences.

Since 2017, the EU has fined Google a total of about eight billion euros ($8.7 billion) without correcting the abuses associated with the all-powerful search engine.

Critics argue that even such massive fines are pocket change for the biggest tech giants, given that Google’s profits average roughly 20 billion euros per quarter.

These concerns are why the commission has granted itself the authority to deconstruct offenders and, if necessary, force them to sell a portion of their business.

Some compare this to a “atomic bomb”. But would the EU dare to use it?

“We have been engaging with corporations for months to make it obvious that the game rules have changed. Thierry Breton, the EU’s internal market commissioner, told AFP that any company found to be non-compliant would face severe fines.

The commission will now investigate each company’s compliance plans and continue to engage with the major corporations and third-party organisations involved.

The DMA will enable the EU to act more rapidly by reducing the burden of proof for the 100 or so specialists responsible for enforcing the rules at the Commission.

For example, under earlier legislation, the commission initiated proceedings against Google in 2010, but it was not until 2017 that the US company was fined 2.4 billion euros.

After multiple appeals, Brussels is still waiting for a definitive decision from the EU courts.

Under the DMA, the commission has 12 months to decide whether to begin an action against a corporation. To prevent lawyers from strangling the regulator with hundreds of pages, documents would be limited to 50 pages.

“This is an important step that will enable progress,” said Andrea Collart, an antitrust specialist at Forward Global.

“The DMA attempts to respond concretely to the needs of competitors who today cannot compete with the digital giants,” he said in a statement.