The EU tries to loosen Big Tech’s grip

Big Tech finally has imperatives to abide by. Below: you must not bundle products and you must allow interoperability between different systems. Penalties for violations include a fine of up to 20 percent of a company’s worldwide revenue or even the dissolution of businesses for repeat offenders. the Introduction of the Digital Markets Act in the EU, the text of which was finalized last week, means that a user of Facebook’s WhatsApp messaging service can text a friend who uses another service. This means that Apple must allow its smartphone users to select apps outside of its own app store. It’s the biggest overhaul of the digital marketplace in 20 years, and that’s to be welcomed.

With these basic rules – the so-called ex-ante regulation – a departure from the previous system of subsequent enforcement of supposedly problematic behavior with reference to violations of general antitrust law has taken place. Even though the EU takes a much broader view of competition law than the US, traditional antitrust laws that define consumer harm through the lens of prices have not kept up with the digital economy, where personal data is traded for supposedly free services, as are the main producers of a marketplace its gatekeepers are.

The DMA is a strand of two policies designed to help restore the balance in favor of consumers and competitors; The upcoming Digital Services Act will focus on privacy and how big tech should use personal data. The legal texts mark a turning point, not least because they place tech gatekeepers in the same camp as other “utility” sectors such as finance, energy and telecoms, which follow ex-ante regulation due to their size and importance to everyday consumers have to live. It shows that too Big Tech’s ability to influence lawmakers is dwindling, despite all efforts; Google has had to apologize for targeting one of the law’s main architects, Thierry Breton, as part of its attempts to defend itself against the law. lobbyists Complaints that innovation may be harmed, and that safety could be compromised, have been largely ignored; Arguments that have also been put forward by banks before and before they were hit by groundbreaking regulation.

It is no coincidence that a market without large producers and therefore with less potential for political influence but with many consumers is taking the lead in shaping regulation. Nor is it a negative development. The US position is less clear. While regulators like the Federal Trade Commission’s Lina Khan have been vocal about curbing the power of big tech, the US has Trade Minister Gina Raimondo argued against Brussels‘ “Disproportionate” targeting of American companies.

This is not to say that a Brussels law against the digital monopolies of the 21st century will suddenly produce more innovation or new European champions of the future. For the EU to even begin to compete with the US, a far more comprehensive structural overhaul is needed if it is to foster a culture of entrepreneurship that accepts failure as a prerequisite to success. Access to capital is important and EU reform of capital markets rules to help companies access investors has lagged behind.

By contrast, the DMA was passed in Brussels with unusual ease and speed: the bloc should be commended for its tenacity in pushing through sweeping reforms. The law is badly needed in an attempt to open up the digital marketplace to smaller competitors who previously risked being bought by Big Tech and then buried.

The EU tries to loosen Big Tech’s grip Source link The EU tries to loosen Big Tech’s grip

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