Tuesday, October 3, 2023

The US is urging the European Union to weaken the law on digital markets

When it did dawn on March 25, 2023, after 15 months of endless negotiations, European lawmakers were able to settle on the new rules to curb the dominance of big tech companies, BigTech, through the new Digital Markets Law (DMA, acronym for “Digital Markets Law). Some (English) members of the EEEU have not had time to convey to Brussels their concerns about the disproportionate application of the new regime to American companies.

Curiously, this message to Brussels came while Joe Biden’s administration was busy drafting legislation that would curb the power of the tech giants.

The European Commission reacted indirectly, without ever citing the US, and defended the WFD. «What we want is simple: fair markets in the digital sector too. And now we are taking a big step forward to get there: that markets are fair, open, and competitive,” says Executive Vice President of the Commission Margrethe Vestager. Also known as the “guardians or controllers of the network” due to their impressive control over digital ecosystems, BigTechs “now have to comply with a clearly defined set of obligations and prohibitions that ensure fairer conditions for consumers and businesses for many digital services in the entire EU”.

Internal Market Commissioner Thierry Breton then stressed that “no company in the world will be able to turn a blind eye to this”. Penalty of up to 20% of your total bill if you repeatedly break the rules. Penalties for violating the law can be as high as 10% of annual global sales for first-time violations.

The Digital Markets Act establishes new rules for technology companies, particularly those considered to be controllers or “gatekeepers” of the market, for whom they must accept a series of obligations and prohibitions that ensure fair competition in the digital sector. They need to share your data, build links into their services that take users to other competitors in the industry, and make their services interoperable with other applications from competing companies.

For a digital market company to fall within the scope of the standard, it must have an annual turnover of more than EUR 7,500 million, a market capitalization of more than EUR 75,000 million, and at least EUR 45 million of monthly active users in the European Union.

With the WFD already in place, the US and its most affected multinationals are looking at ways to soften the application of this rule. Therefore, Microsoft is requesting that this legislation not apply to the Bing search engine. With very similar arguments that it’s not a massive enough service. Apple claims that iMessage is not included in the DMA. But the iPhone messaging service has more than 1 billion users worldwide.

Furthermore, Microsoft denies that Bing has to fulfill the same obligations as Google Search, even though their market share is much smaller (3%). At stake is whether or not Bing users should be offered links to other search engines, including Google.

Apple doesn’t want to have to open up the iPhone’s messaging service to competitors, notably Meta’s WhatsApp.

The timing chosen for these performances is no coincidence. The European Commission plans to nominate tomorrow, September 6th, those companies that have a maximum of six months to adapt to the WFD as “guardians of the network”. This will extend the process until March 2024.

But the DMA’s big supporter, European Commission Vice President Margrete Vestager, has announced that she is stepping down temporarily as she runs for President of the European Investment Bank (EIB). He competes for the position with Nadia Calvio, First Vice President of the Government and Minister for Economy and Digital Transformation, and former Italian Finance Minister Daniele Franco.

The European Commission has decided that Vestager will be replaced by Justice Commissioner Didier Reynders (who will be in charge of the competition portfolio) and Vice-President Vra Jourová (directing and leading), while Ecofin takes the decision on the chair of the EIB Coordinating the work of “Ein Europe adapted to the digital age.”

World Nation News Desk
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