Why Big Tech won’t run wild in Europe

When Ursula von der Leyen took over as president of the European Commission in late 2019, she clearly stated her top priorities would be battling climate change and improving another part of daily life that many think is out of control – the digital environment.

Along with the rest of the world, the commission she heads – which administers the European Union at the direction of the European Parliament and member countries – could not have foreseen that a global pandemic would add additional challenges to the debate and governance that is already enormously complex. Yet like the weather, the parliament and commission have moved inexorably forward. Their determination to rein in Big Tech was demonstrated last month when they announced provisional approval of the Digital Markets Act (DMA), new legislation that will impose a variety of requirements on Big Tech companies classified as “gatekeepers”.

The legislation text still needs to be finalized at the technical level and checked by “lawyer-linguists”, then receive final approval, said an announcement from the parliament.

“Faced with big online platforms behaving like they were ‘too big to care’, Europe has put its foot down,” said Thierry Breton, one of the top digital officials in the European Commission. “We are putting an end to the so-called Wild West dominating our information space – a new framework that can become a reference for democracies worldwide.”

Throughout 16 months of talks, representatives from the European Parliament and Commission hammered out specifics of a far-reaching law that sets firm boundaries on the biggest tech companies. The regulations will affect app stores, online advertising, e-commerce, messaging services and other everyday digital tools. A European Parliament announcement said the new rules target “large companies providing so-called ‘core platform services’ most prone to unfair business practices, such as social networks or search engines, with a market capitalization of at least 75 billion euros or an annual turnover of 7.5 billion”.

“Designated as ‘gatekeepers’, these companies provide certain services such as browsers, messengers or social media that have at least 45 million monthly end users in the EU and 10,000 annual business users,” said the announcement.

In addition to having huge revenues and user numbers, a “gatekeeper” company must “control one or more core platform service in at least three member states” said a commission news release. Those core services include “marketplaces, app stores, search engines, social networking, cloud services, advertising services, voice assistants and web browsers”.

Small and medium-sized companies “are exempt from being identified as gatekeepers, apart from in exceptional cases,” said the press release.

Among possibly others, Google, Apple, Amazon, Facebook and Microsoft all clearly meet the “gatekeeper” criteria, which is hardly surprising. It’s no secret that they are indeed the main targets of the legislation.

“The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies,” said Andreas Schwab, a member of the European Parliament from Germany. “From now on, they must show that they also allow for fair competition on the Internet.”

What that means in practical terms is that big messaging services such as Whatsapp, Facebook Messenger and Apple’s iMessage will have to open up and interoperate with smaller messaging platforms. The mission could pose an enormous technical challenge as highly secure encryption and interoperability are by definition at odds with one another.

Another provision of the new DMA says that “combining personal data for targeted advertising will only be allowed with explicit consent” from individual consumers and internet users.