EU officials agree on rules to rein in Big Tech dominance

March 25, 2022 GMT

BRUSSELS (AP) — European Union officials agreed Thursday on a landmark provisional agreement aimed at clamping down on the biggest online companies, dubbed digital “gatekeepers,” by laying out a list of dos and don’ts.

With those rules, the bloc is seeking to prevent tech giants like Google, Meta and Apple from dominating digital markets, a change from its previous practice of issuing big fines for past antitrust violations.

After several months of talks, negotiators from the European Parliament and the Council, which represents the 27 EU member countries, reached a deal on the so-called Digital Markets Act. The provisional agreement now needs to be endorsed by the Council and the European Parliament.

“The European Union has had to impose record fines over the past 10 years for certain harmful business practices by very large digital players,” said Cédric O, the French minister with responsibility for Digital, whose country currently holds the rotating presidency of the Council.

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“The DMA will directly ban these practices and create a fairer and more competitive economic space for new players and European businesses,” he said.

The new rules prevent gatekeepers from ranking their own products or services higher than those of others or reusing data collected from different services. There are also tighter restrictions on targeted online ads and stronger requirements for different messaging services or social media platforms to be able to work with each other — an effort to avoid the domination of a few companies because they have already established big networks of users.

The Digital Markets Act’s criteria for defining a gatekeeper have been tweaked to include companies earning at least 7.5 billion euros in annual revenue in Europe in the past three years, have a market value of 75 billion euros, provide services in at least three EU countries, and have 45 million users and 10,000 business users established in the EU.

Violations could be punished with whopping fines: up to 10% of a company’s annual income. For a repeat offence, a fine of up to to 20% of its worldwide turnover may be imposed which could work out to billions of dollars for wealthy Silicon Valley companies.

“If a gatekeeper systematically fails to comply with the DMA, i.e. it violates the rules at least three times in eight years, the European Commission can open a market investigation and, if necessary, impose behavioral or structural remedies,” the Council said.