European regulators on Thursday revealed their plan to rein in the anti-competitive practices of Big Tech and fundamentally remake how some of the world's most powerful companies do business. The rules, which target tech giants like Apple, Amazon, Meta and Google, are far-reaching and would have huge ramification for those companies' software and services.
The Digital Markets Act, which on Thursday was agreed to by European Union authorities, establishes new rules to govern the behavior of tech's "gatekeepers" — most of them U.S. companies — through measures like forcing the largest messaging apps to exchange texts, video or files with smaller players. Apple's iMessage and Meta's WhatsApp in particular would have to open their long-closed ecosystems, making them interoperable with other messaging apps.
The agreement also signals huge headaches for Google in its prohibition on "combining personal data for targeted advertising" without explicit consent, and the DMA's reported bans on platforms giving a leg up to their own offerings could force major changes at Amazon. Many companies get hit by multiple provisions: Apple, for instance, will also need to contend with a reported requirement to allow side-loading of apps outside of its App Store, something it's spent years fighting internationally.
The changes may not be limited to Europe either. The bloc has a history of moving first and most aggressively on tech regulation, as it did on privacy with GDPR. Other jurisdictions have often followed and, even when they didn't, companies discovered it was easier to roll out many of their new business practices across the globe.
"The agreement ushers in a new era of tech regulation worldwide," Andreas Schwab, a member of the European Parliament who helped lead the negotiations between the EU's various bodies, said in an announcement of the agreement. He said the DMA "puts an end to the ever-increasing dominance of Big Tech companies."
The tech giants in turn have dismissed the rules, which have been in development for more than a year, as an attack on U.S. companies that tips the scales toward less innovative rivals.
The measure still needs a final vote from the European Parliament and Council, but their approval is all but assured. The agreement applies to services that existing case-by-case competition enforcement have found are "most prone to unfair business practices, such as social networks or search engines," as well as browsers and messengers. It focuses on companies worth over about $83 billion (75 billion euros).
First-time offenses can result in fines of 10% of global turnover; for repeated infringements, the penalties can be twice that.