EU’s new attack on big tech risks becoming ‘missed opportunity’

The EU’s strictest-ever crackdown on big tech has only just begun, but critics fear it’s already missing the targets.

Called the Digital Markets Act (DMA), the landmark law aims to curb the power of tech giants.

Under the rules, the EU can designate companies that dominate a marketplace as “gatekeepers.” This forces them to make their services open to competitors. 

Whatsapp, for instance, has to become interoperable with third-party messaging services. Mobile operating systems, meanwhile, must provide access to alternative app stores.

As the rules came into force today, the EU had designated six gatekeepers: Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft.

Their approaches to compliance have already caused alarm. Apple’s has attracted the loudest condemnation.

The backlash to Apple’s DMA plans

Apple’s App Store was a prime target of the DMA. With full control of the platform, the company had banned alternative payment methods and charged developers a whopping fee of up to 30% of revenue.

Under the EU’s new rules, that control has to loosen. But Apple isn’t letting go without a fight.

In response to the law, Apple has cut the commission it takes from developers in Europe. However, it’s also introduced a new fee for apps installed through third-party stores.

Tech companies have pilloried the proposals. In a letter to the European Commission, Spotify and 33 other firms said Apple’s plans “make a mockery of the DMA.”

“We all have a role to play.

Firefox maker Mozilla has another concern.

The DMA forces iOS to support alternative browser engines, but Apple plans to restrict the interoperability to “EU-specific apps.” According to Mozilla, this forces the company to build and maintain two separate browser implementations.

Kushall Amlani, the company’s global competition and regulatory counsel for Mozilla, fears that DMA will waste a “once-in-a-generation” chance to protect digital competition.

“From what we’ve seen of gatekeeper compliance proposals, it is yet to live up to this potential in practice and risks becoming a missed opportunity,” Amlani told TNW.

“The commercial incentives to restrict fair access to closed ecosystems remain strong.”

The DMA can still bite Apple

Amid the concerns about the DMA, there are positive signs that the EU will not back down.

One is a recent punishment doled out to Apple. On Monday, the bloc fined the company €1.8bn for stifling music streaming rivals — the first penalty it’s ever imposed on the tech giant.

“The European Commission wanted to share a clear signal to digital platforms that it is really serious about regulating competition,” Thomas Husson, VP principal analyst at tech advisory firm Forrester, told TNW.

“The fine represents about 0.5% of Apple’s global turnover, but in theory, fines for firms that do not comply moving forward with the EU’s DMA could reach up to 6% of their total turnover.

Mozilla hasn’t lost hope either. The company has been encouraged by the Commission’s engagement with the browser issue, Amlani said.

With vigilant oversight and proactive enforcement, he still believes the DMA can set a global standard for tech regulation.

“It has the potential to give EU consumers huge benefits, including greater choice over the products they use and more control over their data,” he said.

The impacts on the tech we use could be immense. We covered the full implications in this guide.

The full benefits, however, could disappear if the public doesn’t pay attention.

“Consumers, companies, and consumer groups all have a role to play in holding the gatekeepers to account,” Amlani said. “It will take a coordinated effort to make the DMA a success.”