The challenge of regulating the internet, a dynamic and immense realm, has prompted the European Union (EU) to formulate its response in the form of the Digital Markets Act (DMA). This legislation is poised to confront some of the most formidable and wealthy companies in history, including Google, Amazon, Apple, Meta, ByteDance, and Microsoft, whom the European Commission now classifies as "gatekeepers" subject to this regulation. Notably, X (formerly Twitter) is conspicuously absent from this list.
So, how is the DMA set to transform the internet, and what are the potential implications of these changes?
The DMA was officially enacted in 2022, and the 22 targeted companies have until 6th March 2024, before enforcement comes into effect. With 44 million EU users accessing their services, many of these changes will also impact British users, potentially influencing the ongoing regulatory efforts in the UK Parliament.
The legislation's overarching goal is to enforce and export the EU's vision of fair competition, consumer choice, and safeguarding in the digital economy. It also addresses contentious issues like misinformation, political interference, and the responsible use of artificial intelligence (AI). While tech companies share the aspiration of fostering a fair, safe, and competitive internet, they often contend that the EU's approach and chosen methods are misguided and counterproductive. The United States and, to a lesser extent, the UK, have differing interpretations of online safety and open competition.
Western nations have historically faced difficulties regulating the internet, primarily because policymakers and legislators lag behind tech firms in digital proficiency. This discrepancy often leaves them outgunned and outwitted. For instance, during my tenure as a reporter at Reach PLC, I uncovered the delayed implementation of certain provisions of the UK's Digital Economy Act 2016. The government aimed to enforce "age verification checks" on internet browsers, but when we broke the news that Google Chrome adopted "DNS encryption" to evade the law, rendering it unenforceable, the government eventually abandoned this provision in favour of a broader "duty of care" concept, which is now part of the Online Safety Act in Parliament's agenda to combat online harm.
In contrast, the EU has a track record of effective regulation in this domain. The General Data Protection Regulation (GDPR) is a prime example, shaping data protection laws globally. GDPR mandates user consent for cookies on every website, a routine experience for internet users. More recently, the EU compelled Apple to adopt the USB-C charging port for the sake of "fair competition." The European Commission has demonstrated its determination to enforce the DMA, causing some tech insiders to worry that reasonable concerns and insights from campaigners and lobbyists are falling on deaf ears. Concerns include the potential loss of innovation in the EU's social media landscape, disadvantages for its 44 million users, and the potential redirection of tech companies and investments elsewhere.
However, the DMA wields considerable authority, including the threat of substantial fines and even the power to compel companies to divest parts of their business to operate in Europe. As a result, companies are swiftly adapting to comply with the new regulations.
In many ways, the Commission had already won the argument before the law's introduction. Notably, TikTok, owned by ByteDance, proactively modified its service in response to the impending legislation. Users now have the option to opt out of TikTok's signature algorithm (termed "personalisation" by the EU), which collects user data to tailor content recommendations. The algorithm played a pivotal role in TikTok's success during the lockdown, as it introduced a new genre of engaging videos. Now, users can choose to view only popular content and content from selected users, akin to Instagram in its early days.
What other changes should we anticipate?
Google:
- Easier Switching: Google will facilitate more user-friendly options for platform switching and data management while reminding users of these choices;
- Increased Transparency: Google may be required to provide increased transparency concerning its advertising practices and algorithms;
- Fair Ranking: To comply with anti-self-preferencing regulations, Google might need to adjust how it ranks its own services alongside those of competitors in search results.
Amazon:
- Marketplace Fairness: Amazon may need to ensure a "level playing field" for third-party sellers on its platform, potentially leading to revisions in its seller policies;
- Data Access: The DMA may mandate improved data access and interoperability for third-party sellers on Amazon.
Apple:
- App Store Pricing: Scrutiny over Apple's App Store policies may necessitate changes in fee structures and review processes, potentially granting app developers greater influence;
- New App Stores: Apple (and Google) could be compelled to allow alternative methods for app downloads by accommodating third-party app stores on iOS and Android devices.
Meta:
- Data Portability: To meet data portability requirements, Meta might need to simplify data migration to other social media platforms;
- Interoperability: The DMA may demand interoperability with other social networks, potentially enabling cross-platform communication.
ByteDance:
- Algorithm (Personalisation) Opt-out: TikTok has already enabled users to opt out of its renowned personalised algorithm;
- Content Moderation: ByteDance may need to bolster its content moderation practices to align with regulations against illegal and "harmful" content;
- Algorithm Transparency: The DMA mandates greater transparency in TikTok's recommendation algorithms to prevent favouring its own content.
Microsoft:
- Browser Choice: Microsoft's Windows operating system may need to offer users more choice when selecting default web browsers and search engines;
- Market Dominance: Microsoft's position in specific markets, such as productivity software, could face scrutiny for potential anticompetitive practices.
Some companies recently designated as "gatekeepers," including Amazon, contest their classification. The Commission is also investigating whether Apple's iMessage app and Microsoft's Bing, Edge, and Microsoft Advertising services fall under this designation. Notably, X did not receive the "gatekeeper" label despite widespread calls for its regulation, raising the possibility of alterations to the law's scope before enforcement begins.
One unique aspect of this legislation is its enforcement mechanism. Unlike the GDPR, the DMA will be enforced by the Commission rather than individual member states. Companies must decipher and integrate these rules alongside their terms of service, perform independent audits, and submit them to the European Commission.
Numerous questions linger regarding the practical implementation of this process and the extent to which lawyers and campaigners affiliated with major tech companies can influence and mitigate its impact. The DMA is undeniably ground-breaking and ventures into uncharted territory for the internet.
It is probable that users may not heavily utilise the provisions offered by the DMA. The likelihood of users switching platforms in significant numbers or disabling "personalisation" remains low. Users generally accept algorithms and data collection because of the remarkable features and services they enable. Big tech firms, not the EU, have significantly enhanced our digital lives, a fact that users readily acknowledge.