On paper it was a great success: two weeks ago the responsible EU court confirmed a fine of 2.4 billion euros, imposed by the EU Commission on Google for obstructing competitors. The behavior complained of began in 2008, the Brussels authority has been investigating since 2010, and in 2017 it set the penalty and prohibited the practice. Google sued and could now move to the next instance. 13 years – that’s an eternity in the fast-moving online business. Until the Commission can prohibit behavior and until that is legally binding, smaller competitors will be forced out of the market for a long time.
A new set of rules is now supposed to remedy the situation, and on Tuesday it took an important hurdle: The European Parliament’s Internal Market Committee in Strasbourg adopted its negotiating position on the Digital Markets Act with 42 votes to two. The legal act is commonly known in Brussels under its English abbreviation DMA. The plenary session of Parliament will confirm this position in mid-December, after which discussions will begin with the Council of Ministers, the body of the member states. The council will tighten its position this Thursday. If both legislative chambers come to an agreement by summer, as expected, the legal act could come into force at the end of 2022. The MEP responsible for the law, Andreas Schwab (CDU), said that the “very clear” result of the vote sends a message to the member states that the parliament will remain tough in the talks.
The EU Commission presented the draft law last December, together with another important legal act: the Digital Services Act, which provides stricter rules against illegal content. Both laws together are intended to give the Internet in Europe new rules.
Member States made few changes to the Commission’s original DMA proposal. The EU Parliament, on the other hand, tightened the draft law in some points, but at the same time restricted its scope. The legal act will allow the Commission to make powerful internet platforms such as Google “gatekeepers”. These companies are bouncers and web signposts for citizens; They can take advantage of this position to favor their own offers and to put smaller rivals at a disadvantage. Therefore, the law will make gatekeepers special rules of conduct. These are based on the experience of the EU Commission in competition proceedings against corporations such as Google, Apple and Amazon.
Apple must allow other app stores
These powerful companies are no longer allowed to prefer their own services in search results, as Google did in the 2.4 billion case. You also mustn’t – like it Accused Amazon will – collect business data from independent retailers on the platform and use it for their own offers. And they must allow cell phone users to install other app stores and thus have more choice in cell phone programs. This will hurt Apple very much. In the event of violations, the Commission will in future be able to intervene directly without first having to prove market power and harmful consequences in lengthy investigations.
A point of contention between Parliament and the Council of Ministers is likely to be the guideline values for classification as a gatekeeper. The Council stuck to the Commission’s proposal that companies with a market value of 65 billion euros and a turnover in Europe of 6.5 billion euros come into question if they control an online platform, such as a search engine, a cloud service or a marketplace operate. In addition to the US companies Google, Amazon, Facebook, Apple and Microsoft, this could affect some EU companies such as Spotify or Booking.com.
Send a message from Whatsapp to Signal? no problem
Parliament expanded the list of platforms to be considered, including, for example, internet-enabled televisions or voice assistants such as Alexa. On the other hand, the MPs raised the thresholds for turnover to eight billion euros and the stock market value to 80 billion euros. This means that in the foreseeable future only Booking.com will be able to fall under the law from Europe. EU parliamentarian Schwab argues that it would be better if the Commission focused on the really big companies when implementing and monitoring the legal act. Critics warn, however, that the US government could view it as an unfriendly act if the landmark law affects almost only American companies.
Another important addition to the Commission’s draft is that Parliament wants to force gatekeepers to allow exchanges between rival messenger services and social media. Then a user could, for example, send a message from WhatsApp to the competitor Signal – this opening should also stimulate competition.