European Legislation Troubles Big Tech

Most of us are already aware that EU laws have presented a major hurdle for tech giants. That’s especially true for those that rely on data harvesting for their revenue, such as Meta and Alphabet. Changes to privacy, such as the one Apple brought about not too long ago, suppress the companies’ earning potential. As a new round of legislation gets introduced into the EU, there may be serious shifts in the tech industry.

Lawmakers agreed on a new tech sector law that would introduce hefty fines for those that don’t comply. Namely, the charges could come up to the billions, becoming unignorable even for huge companies. While the act still needs legislative approval, the so-called Digital Markets Act (DMA) is inching closer to reality.

While the legislation doesn’t target the tech giants by name, it does include them all in the definition of gatekeeper. Gatekeepers are companies with a market capitalization of €75 billion and 45 or more million monthly users. Alphabet, Meta, Apple, and Amazon all fall under that umbrella. The goal of the new law is to impose some new market rules to ensure fair play.

This is far from the first attempt from the EU to impose fines on digital market players. Tech companies seem to partake in foul play often, as profits from such actions would outweigh the punishments. The new law aims to halt foul play definitively instead of charging it incrementally. The end goal is the ability for smaller market participants to be able to compete in the somewhat monopolized market.

One of the major changes the law introduces is that gatekeepers won’t be able to self-promote. They will be forbidden from ranking their own products higher than competitors’. There’s also a privacy element, as giants won’t be able to use data collected in one app for another.