How do we protect ourselves from dependence on the technological giants?
The following contribution corresponds to the portal of The Diplomat and the author is Pedro Fernaud, who is a journalist and teacher with twenty-five years of experience in various journalistic media: radio, written and online press, and more than 10 years linked to the field of teaching.
He has a degree in Journalism from the Complutense University and in Integral Communication from the Francisco de Vitoria University and a Master’s Degree in Teacher Training, in its branch of Social Sciences, from the Rey Juan Carlos I University.
We are increasingly dependent on the big technology companies for almost everything while the EU tries to stop the phenomenon
There are several events that illustrate the type of world we are building and in which we are immersed.
With these coordinates in mind, the global technological blackout that occurred last July deserves special analysis, which affected multiple sectors, from airlines to banks and the media, which revealed our dependence on a small number of software providers.
The incident was so large that, for example, in Spain, the airport operator Aena suffered more than 400 cancelled flights and thousands of delayed flights.
It is a generally accepted fact that the latest global technological blackout has highlighted the extent to which we depend on a very small number of technological giants, known in industry jargon as Big Tech or technology titans.
This term refers to the largest IT companies in the world, especially the five big American technology companies: Alphabet (Google’s parent company), Amazon, Apple, Meta (formerly Facebook) and Microsoft.
Nvidia and Tesla can also be added to this group, forming the Magnificent Seven. In addition, in the global context, Chinese companies such as Baidu, Alibaba, Tencent and Xiaomi (BATX) are also included in this group due to their significant market power and technological influence. The term Big Tech came into use around 2013 and gained popularity following investigations into Russian interference in the 2016 US election, due to the large volume of data these companies handle and their ability to influence user opinions and decisions. This concentration of power and data has led to comparisons with other large historical industries such as oil and tobacco. Their ability to shape social and economic behaviour has led to criticism of the disproportionate power they wield.
Our great dependence on big tech
When it comes to determining which companies influence our daily lives the most with their power and influence, experts sharpen their analysis and point to these four corporations: Microsoft, Apple, Alphabet (Google) and Amazon.
In what specific ways do we depend on them on a daily basis?
Microsoft has shaped the technological and business environment of many companies with its software, such as Windows and Office, as well as its Azure cloud platform. Apple has revolutionized consumer and technology design with its focus on innovative products like the iPhone, iPad, and its digital services. Google’s parent company, Alphabet, is a tech giant that dominates online advertising and has diversified its impact with innovations in artificial intelligence and autonomous technology. While Amazon has transformed e-commerce and logistics, and its AWS cloud service leads the digital infrastructure market.
Hot on the heels of these tech titans is Meta, formerly known as Facebook
The owner of the social media platforms Facebook, Instagram, and WhatsApp, and which has entered the virtual reality market with the acquisition of Oculus.
The company generates most of its revenue through targeted advertising, taking advantage of the extraordinary amount of data it collects from its users.
One of the main strengths of these tech giants is their ability to drive technological cooperation, facilitating partnerships with traditional banking that promote innovation and efficiency in financial services.
In developing regions, these companies improve financial inclusion by providing access to previously inaccessible markets and services, which especially benefits small and medium-sized businesses.
In addition, their competence in advanced technologies allows other companies to access artificial intelligence and big data tools, fostering a more robust and competitive technological ecosystem.
Why it is essential to be alert to the concentration of power of big tech
Of course, not everything that glitters is gold. Meta, for example, has been questioned for its handling and protection of users’ personal data, with scandals such as Cambridge Analytica, which exposed how the data of millions of users was used without their consent to influence elections.
In addition, Meta’s recommendation algorithms have been criticized for promoting misinformation and divisive content, since they prioritize engagement and interaction, which often results in the amplification of fake news and conspiracy theories.
Beyond the Meta case, the reality is that the incursion of Big Tech in the financial sector can introduce financial instability, since these companies are not subject to the same regulation as traditional banks, which can increase systemic risks.
Unfair competition is another critical issue
The infrastructure and power of these big tech companies allows them to quickly dominate the market, displacing local and foreign banks and fintechs, which can lead to an excessive concentration of economic power in a few hands.
In addition, user privacy is constantly at risk, as the business model of many of the Big Tech companies is based on the collection and sale of personal data, which raises concerns about data protection and information security.
It is in this critical context with the formidable dependence that the technological giants are generating in us that Scott Galloway, marketing expert and professor at New York University, analyzes in his book ‘The Four’ how Amazon, Apple, Facebook and Google have built empires that deeply affect our lives. According to Galloway, these companies ‘evade taxes, invade our privacy and destroy jobs in their eagerness to maximize profits’.
He criticizes that these companies have created a positive illusion around them
While their excessive power and size are alarming. Amazon, for example, is described by Galloway as a “prince of darkness” that dominates retail and seeks to cut costs through robots and automated stores. Facebook, according to Galloway, benefits from our need for love and connection, but has been criticized for its role in spreading fake news.
Google is described as a “modern god” that answers our questions, and Apple, with its sacred products, appeals to our desires for luxury and exclusivity. Galloway suggests that, instead of four tech giants, there should be ten companies to foster competition and economic growth.
How do we get to the point of dependency?
“I see it as a feedback loop. “First they offer you basic and free services, such as an email or a search engine,” reflects Ekaitz Cancela, researcher at the Internet Interdisciplinary Institute (IN3) of the Universitat Oberta de Catalunya and author of Utopías digitales (Verso Libros, 2023), in the newspaper El País.
“The data these companies collect from their users is then used to shape their ad personalization models, with which they have dominated the global advertising market for years. Now, they use that data to train AI models that they use in cloud services, which they then offer to governments. So they are in a perfect position to manage countries’ security systems,” he concludes.
Along these lines, according to research published by Tech Inquiry
Microsoft has signed more than 5,000 contracts with US military agencies since 2016, Amazon more than 350 similar agreements and Google another 250.
In this context, just two years ago, in 2022, the Pentagon awarded a mega-contract to Amazon, Google, Microsoft and Oracle worth 9 billion dollars to develop a cloud computing project.
In other words, the tech giants not only control the systems we need to work, entertain ourselves, run a business or do administrative tasks: they also have a presence in the military field.
How does the EU try to curb the insatiable appetite of the tech giants?
The truth is that the European Union is aware of Europe’s technological vulnerability. Hence the Gaia-X project, which aims to encourage digital autonomy and the development of a European cloud.
But the invasive reality of the technological titans does not change overnight. “To develop Gaia-X, agreements have been signed with the big technology companies. Even the EU adopted the Oracle cloud two months ago,” Javier Sánchez Monedero, a researcher in Artificial Intelligence at the Department of Computer Science and Numerical Analysis at the University of Córdoba, explains to El País.
Sánchez Monedero highlights the possibilities of the Internet and contrasts this potential with the reality of the technological oligopoly in which we are immersed. In his own words: “The network is perfectly resilient, the Internet is designed to operate in a decentralized and federated way. What is not resilient is that we have a layer on top of it with three or four products to which everything is delegated.”
To reverse this trend, the European Union has also developed the Digital Markets Act (DMA)
Whose objective is to promote competition and innovation, as well as improve equity for companies that operate in digital markets. This legal device offers advantages by encouraging greater competition in the digital market, limiting the power of big tech and giving consumers more choice and control over their personal data.
However, it also raises problems, such as potential complexity and confusion for users when deciding on new configuration options and potential security risks, due to the opening of platforms to third parties.
In addition, tech companies have warned that it could lead to changes in services that users do not want, which could affect the consumer experience.
Of course, not everyone is aligned with the EU’s critical zeal towards the tech titans. Enrico Colombatto, director of the Turin Centre for Economic Research, criticises the European Union’s (EU) hostile stance towards big tech companies, pointing out that this attitude could harm the continent’s economic future.
Regulations imposed by the EU
According to the Italian economist, unlike the United States, which seeks to cooperate with large technology companies to encourage innovation and maintain global competitiveness, the EU imposes strict regulations that hinder growth and encourage companies to relocate to more favorable environments.
This regulatory rigidity could make Europe dependent on foreign technologies, while the US continues to attract investment and talent.
The reality of China’s technological overconcentration warns of a global phenomenon
In any case, it seems clear that in the capitalist reality in which we live, technological development tends to concentrate in very few hands, with similar developments in different parts of the world.
An example of this is the tremendous power of the Chinese technological giants: Alibaba, Tencent and Baidu dominate the domestic market and are expanding their influence globally.
Alibaba, a leader in B2B commerce with a strong presence in Europe through AliExpress, generated revenues of $109.5 billion in 2023. Tencent, founded in 1998, is known for WeChat, the most popular messaging app in China, with 1.3 billion users, and in 2023 had a brand value of $214 billion.
Baidu, the ‘Chinese Google’, dominates the search market in China and is a leader in artificial intelligence and autonomous vehicles, with revenues of $19.5 billion in 2023.
In short, Big Tech has a double impact on the economy and society. On the one hand, they bring important advances in technology and financial inclusion, facilitating cooperation and access to advanced tools.
On the other hand, their power and reach can generate financial instability, unfair competition and privacy risks, posing significant challenges that require adequate regulation and supervision to balance their benefits and mitigate their disadvantages, including harm to small and medium-sized technology companies.
In this direction, it is crucial to diversify cloud service providers and encourage open source options to mitigate the risks of centralization. Governments and organizations must implement laws to protect data and foster a safer and more competitive digital environment.
Digital Markets Act: Commission appoints six gatekeepers
The following contribution is from the European Commission’s portal on digital markets issues
The European Commission has today appointed, for the first time, six gatekeepers (Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft) under the Digital Markets Act (DMA).
In total, 22 core platform services provided by gatekeepers have been appointed. The six gatekeepers will now have six months to ensure full compliance with the DMA obligations for each of the core platform services they have appointed.
Under the DMA, the European Commission can designate digital platforms as «gatekeepers»
If they provide an important gateway between businesses and consumers in relation to core platform services. Today’s designation decisions are the result of a 45-day review process conducted by the Commission following notification by Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft and Samsung of their potential gatekeeper status.
In particular, the Commission has established gatekeeper status with respect to the following specific core platform services
In parallel, the Commission has opened four market investigations to further assess Microsoft and Apple’s claims that, despite meeting the thresholds, some of their core platform services do not qualify as gateways:
Microsoft: Bing, Edge and Microsoft Advertising
Apple: iMessage
Under the DMA, these investigations aim to determine whether a sufficiently substantiated rebuttal submitted by the undertakings demonstrates that the services in question should not be designated. The investigation should be completed within a maximum of 5 months.
In addition, the Commission has opened a market investigation to further assess whether Apple’s iPadOS should be designated as a gatekeeper, despite not meeting the thresholds. Under the DMA, this investigation should be completed within a maximum of 12 months.
Furthermore, the Commission has concluded that, although Gmail, Outlook.com and Samsung Internet Browser meet the thresholds set out in the DMA to be considered gatekeepers, Alphabet, Microsoft and Samsung have provided sufficiently substantiated arguments showing that these services do not qualify as gateways to the respective core platform services.
Therefore, the Commission has decided not to designate Gmail, Outlook.com and Samsung Internet Browser as core platform services. It follows that Samsung is not designated as a gatekeeper for any core platform service.
Next steps for designated gatekeepers
Following their designation, gatekeepers now have six months to comply with the full list of dos and don’ts under the DMA, giving more choice and freedom to end-users and business users of gatekeeper services.
However, some of the obligations will only apply upon designation, for example the obligation to inform the Commission of any intended concentrations.
It is up to designated companies to ensure and demonstrate effective compliance. To do so, they have six months to submit a detailed compliance report outlining how they comply with each of the DMA’s obligations.
The Commission will monitor the effective implementation and enforcement of these obligations
In the event that a gatekeeper fails to comply with the obligations set out in the DMA, the Commission may impose fines of up to 10% of the company’s total global turnover, which may be increased to 20% in the event of a repeated infringement.
In the event of systematic infringements, the Commission is also empowered to take additional corrective measures, such as obliging the gatekeeper to sell a company or parts of it or prohibiting it from making purchases of additional services related to the systemic non-compliance.
In the future, other companies could submit notifications to the Commission under the DMA, based on their self-assessment against the relevant thresholds. In this context, the Commission is engaged in constructive discussions with all relevant companies.
Background
The DMA aims to prevent gatekeepers from imposing unfair conditions on companies and end-users and to ensure the openness of important digital services. Alongside the DMA, in December 2020 the Commission also proposed the Digital Services Act, to address the negative consequences arising from certain conduct by online platforms acting as digital gatekeepers of the EU single market.
The DMA, in force since November 2022 and applied since May 2023, aims to ensure contestable and fair markets in the digital sector.
It regulates gatekeepers, large online platforms that provide an important gateway between business users and consumers, whose position may give them the power to create a bottleneck in the digital economy.
Companies that provide at least one of the ten core platform services listed in the DMA are presumed to be gatekeepers
if they meet the criteria listed below. These core platform services are: – online intermediation services such as app stores
– online search engines
– social networking services
– certain messaging services
– video sharing platform services
– virtual assistants
– web browsers
– cloud computing services
– operating systems
– online marketplaces
– advertising services.
A company can be designated as a gatekeeper for several core platform services.
There are three main quantitative criteria that create the presumption that a company is a gatekeeper as defined in the Digital Markets Act:
(i) when the company achieves a certain annual turnover in the European Economic Area and provides a core platform service in at least three EU Member States
(ii) when the company provides a core platform service to more than 45 million monthly active end users established or located in the EU and to more than 10,000 annual active business users established in the EU;
(iii) when the company meets the second criterion for the past three years.
The Digital Markets Act defines a number of specific obligations that gatekeepers will be required to comply with, including prohibiting them from engaging in certain conduct on a list of dos and don’ts.
The Digital Markets Act also empowers the Commission to conduct market investigations to:
(i) designate companies as gatekeepers on qualitative grounds
(ii) update gatekeeper obligations where necessary; (iii) design remedies to address systematic breaches of the Digital Markets Act rules.
Can European digital markets dominate US Big Tech?
The author of the following contribution is Dr Giovanna Massarotto, an international expert on antitrust, intellectual property law and economic regulation in the field of information technology. She holds a PhD from Bocconi University in Milan, where she researched and taught competition law as an adjunct professor. She is currently a Research Scholar at the Centre for Technology, Innovation and Competition (CTIC) at the Carey Law School of the University of Pennsylvania and affiliated with the UCL Centre for Blockchain Technologies (UCL CBT). Dr. Massarotto has been invited to present on antitrust and legal issues related to digital markets by a number of US and EU organisations, including Harvard, Stanford, the University of Chicago, the OECD, the University of Oxford, the European University Institute (EUI) and EU regulatory authorities including the Competition and Markets Authority (CMA) and the Autorita’ per le Garanzie nelle Comunicazioni (AGCOM).
The digital economy has put antitrust regulation in the spotlight, with increasingly dominant tech companies, such as Amazon, Google, Facebook (Meta), Apple and Microsoft, rekindling concerns about private monopolies reminiscent of Standard Oil and AT&T.
However, applying antitrust principles in the digital world is far more complex than in traditional, non-digital markets.
Regulating the tech titans has become a priority around the world, especially in light of the rise of artificial intelligence (AI).
But because these companies are mostly American, the onus of oversight is often perceived as insufficient in the United States.
The problem is that antitrust intervention usually occurs after the fact, requiring the identification of both a monopoly within a clearly defined market and anticompetitive conduct that harms consumers.
However, rapidly evolving digital markets can be difficult to define and tend to concentrate without necessarily causing explicit anticompetitive conduct.
In addition, tech giants often offer free services or increasingly advanced products, making it difficult to prove that they harm consumers.
Europe has addressed this issue with the Digital Markets Act (DMA)
A new law that imposes obligations and prohibitions on companies that reach certain thresholds based on the size of the company, such as turnover and number of users.
These companies identify themselves as “gatekeepers” of critical digital services, and to date, DMA gatekeepers include Amazon, Google, Facebook (Meta), Microsoft, Apple, ByteDance, and Booking.
Gatekeeper bans include “self-preferencing,” which refers to the practice of platforms like Amazon and Google Search preferring their products over those of competitors.
While DMA obligations range from interoperability to data portability, these measures are typically imposed on companies only after an antitrust investigation and a finding of monopolistic conduct.
The DMA complements competition law in Europe (the DMA framework) to ensure competition and fairness in digital markets.
Since 2021, the United States has considered introducing a version of the DMA through a set of antitrust bills that would have adopted a similar regulatory framework
In a new article, I assess the viability of this proposal, conducting a historical and comparative analysis, examining the ideological roots and framework of the DMA.
My analysis begins by defining the core features of the DMA, which I have identified as:
– the approach of the DMA, reflecting the growing power of government in regulating the economy;
– the legal framework of the DMA, characterized by formalism;
– the scope of the DMA to regulate large companies;
– the purpose of the DMA, aimed at ensuring fairness and competition.
I then investigate the origins of the core features of the DMA by examining three major European schools of economic policy: the Historical School, the Austrian School of Economics, and Ordoliberalism.
My analysis reveals how all the core features of the DMA can be found in ordoliberalism. Ordoliberalism originated in Germany in the 1930s and is more of a philosophical concept than a mere school of thought.
Its name comes from the Latin word “ordo”, meaning order, and reflects a way of thinking focused on economic order.
Ordoliberals developed the concept of rules of the game that the state had to guarantee through a legal framework (legal framework and approach of the DMA) in order to secure economic order.
Ordoliberalism developed as a dynamic philosophical concept, evolving through different strands and over at least three generations of scholars.
Ordoliberals shared the belief that monopolies should be avoided, including through strict regulation (scope of the DMA to regulated firms) in order to ensure competition as a basis for economic freedom.
Competition was a necessary means to disempower big business and preserve human and economic freedom. An ordoliberal current, which gained significant influence after World War II by influencing German and European competition laws, introduced the concept of a social market economy. This concept is particularly relevant to defining the DMA’s purpose of ensuring fairness and competition in markets.
Below, I trace the central features of the DMA and ordoliberal ideology in the American intellectual framework
My historical analysis of the United States reveals a way of thinking about competition and market regulation deeply rooted in neoclassical economics, which differs significantly from ordoliberalism.
In the late 19th century, neoclassical economists, including Alfred Marshall and John B. Clark, addressed the abstraction of the deductive theories of classical economists, such as Ricardo, by using more robust mathematics. Neoclassical economists emphasized the concept of utility and consumer-based decision making by influencing the major antitrust schools in the United States: Harvard and, even more so, the Chicago and post-Chicago antitrust schools.
These schools developed analytical tools for assessing competition, such as market definition, structuralism, and the consumer welfare standard, which are still valid today.
In other words, in the United States competition is assessed primarily in economic terms, rather than ethical or philosophical terms, such as thinking in economic order.
The U.S. Supreme Court specifically rejected an ethical interpretation of competition, and the United States is based on a common law system that contrasts with a European system based on civil law. In other words, different ways of thinking about competition and the regulation of large firms arise from different legal and economic traditions.
Consequently, a European DMA-type legislation is not well suited to the American framework and would lack the support of a similar ordoliberal ideology.
Even if we consider Justice Louis Brandeis’s “big is bad” concept
which significantly influenced antitrust enforcement in the United States during the Progressive Era in the early 20th century and which more recently inspired the neo-Brandeisian movement, we do not find the ordoliberal principles underpinning the DMA.
Both Brandeis and the neo-Brandeisians did not develop the ordoliberal idea of thinking about economic order or a similar scheme to explain different economic systems and market forms, including monopolies and partial monopolies.
Moreover, while neo-Brandeisians generally reject the idea that consumers should drive the enforcement of competition laws, ordoliberals developed the concept of a market order designed to make firms responsive to consumer interests.
In other words, the ordoliberal concept of rules of the game aimed to serve consumer preferences and is enforced in a formalistic manner.
Thus, the United States lacks the same approach to economic order and formalism in competition enforcement that are deeply rooted in the European intellectual and legal tradition and underpin the DMA.
As a result, a DMA-type approach to regulating the tech titans is incompatible with the U.S. legal and economic tradition.
However, the United States can draw important lessons from different European approaches and experiences. Just as Europe has moved forward in enforcing its competition law in accordance with its framework, so too must the United States.
I propose that the United States modernize its economic analysis tools for assessing competition in a computer-driven economy by integrating insights from computer science and advanced algorithms.
This article comes to us from Giovanna Massarotto of the Center for Technology, Innovation and Competition (CTIC) at the University of Pennsylvania. It is based on her recent article, “Regulating Tech Titans: What American Antitrust Can Learn from Europe,” available here.
These are the six big tech companies the EU will target with its digital offensive
The following contribution is from the Los Angeles Times and its author is Kelvin Chan who is a multi-skilled correspondent who has worked for many years for the Associated Press, the world’s leading news agency. After many years in Hong Kong writing about Greater China, he is now in London covering technology and innovation in Europe, from digital regulation for the tech giants to the rise of artificial intelligence. He has written countless articles for the AP text messaging service, from breaking news to feature articles. He also has a strong knowledge of digital storytelling, shooting his own videos and photos and working with AP’s specialized camera teams.
By updating its digital regulation, the European Union aims to offer users more choice and make competition fairer.
Six big tech companies including Amazon, Apple and Microsoft faced fresh pressure from the European Union on Wednesday, which moved to counter their digital dominance with far-reaching rules aimed at giving users more choice and making competition fairer.
Google parent Alphabet, Facebook owner Meta and TikTok parent ByteDance were also classified as online “gatekeepers” subject to the strictest requirements of the 27-nation EU’s Digital Markets Act, which amounts to a list of dos and don’ts that seeks to prevent tech giants from cornering digital markets, with the threat of huge fines or even forcing companies to sell parts of their business to operate in Europe.
That means European users of Big Tech’s social media or chat services will soon be able to send messages to rival platforms, prevent their data from being used to serve personalized ads and choose which search engine or browser they prefer rather than sticking with a default version.
It is part of a sweeping update to the EU’s digital rulebook
that will take effect this year and comes weeks after a complementary package of rules aimed at keeping internet users safe, the Digital Services Act, came into force.
A deep dive into Meta’s algorithms shows America’s political polarization has no easy fix
“The most impactful online companies will now have to comply with our EU rules,” European Commissioner Thierry Breton, who is in charge of the bloc’s digital policy, said at X, formerly known as Twitter. “DMA means more choice for consumers. Fewer obstacles for smaller competitors. Opening the doors to the internet.”
The European Commission, the EU’s executive body, said digital platforms can be included as gatekeepers if they act as key gateways between businesses and consumers by providing “core platform services.”
Those services include Google’s Chrome browser, Microsoft’s Windows operating systems, chat apps like Meta’s WhatsApp, social networks like TikTok and others that play an intermediary role like Amazon’s Marketplace and Apple’s App Store.
Companies now have six months to start complying with the requirements of the Digital Markets Act, which is driving changes to the way big tech companies operate.
Google said the new law will require it and other companies to “make several changes to the way their products and services work.”
One of the main goals is to break up the “closed environment where you are somehow locked in and you can’t go anywhere else,” said Alexandre de Streel, a professor of European law at the University of Namur and academic director of CERRE, a think tank in Brussels.
“Consumers will be better off because they will pay less and they will be able to move more easily from one platform to another,” de Streel said. “So that’s the ultimate goal.”
For example, under the DMA, tech companies can’t prevent consumers from connecting with companies outside their platforms.
That could put pressure on Apple to further open its App Store. Video game maker Epic Games and music streaming service Spotify have complained that Apple didn’t let them bypass its Apple Pay system to avoid paying its 30% commission on subscriptions. Apple has since eased some of its longstanding restrictions.
Messaging services will need to work with each other. That means Telegram or Signal users could exchange texts or video files with WhatsApp users. Platforms are prohibited from ranking their own products or services above those of rivals in search results. Amazon therefore cannot make its own-brand products easier to find than those from third-party merchants.
The e-commerce giant has already begun offering European shoppers more visible options when it settled an EU antitrust investigation last year by offering a second “buy box” with a different price or delivery option for the same product.
Online services cannot combine a user’s personal data to create a profile for targeted advertising
That means Meta cannot mix a user’s data from Facebook, Instagram and WhatsApp services without clear consent.
Essential software or apps, such as web browsers, cannot be installed by default alongside the operating system, the way Google’s Chrome comes bundled with Android phones. Instead, consumers will be given a selection screen of search engines and browsers to use on their devices. Google noted that it is already doing this and said it would remind European users of their options. Meta said it is studying the commission’s announcement, which had no impact on its services. Amazon said it will work with Brussels on its implementation plans.
Microsoft said it accepted being named a watchdog and welcomed the commission’s decision to consider its request to exempt some of its services, including its Bing search engine and Edge browser.
TikTok “fundamentally” disagrees with the commission’s decision, EU public policy chief Caroline Greer said on X. The video-sharing app, which entered the European market about five years ago, has “brought choice” to an industry largely controlled by incumbents, she said.
Violations could result in fines of up to 10% of a company’s annual global revenue and up to 20% for repeat offenders, or even the dissolution of the company.
Innovate, protect and influence: The EU’s technology trilemma and how to solve it
The following contribution is from the European Council of Foreign Relations’ portal and is authored by José Ignacio Torreblanca, director of the Madrid office
As technological competition between the United States and China is growing, the EU’s next technology agenda must be more purposeful in order to maximise its global influence
Critical and emerging technologies are essential for the security and economy of the European Union, especially for the green and digital transitions. But in the midst of an escalating «tech war» between the United States and China, these technologies are the subject of a heated geopolitical dispute, and there is a risk that they will be used for irresponsible and undemocratic purposes.
Indeed, the new European Parliament will have to make difficult decisions about its technology agenda. In making these decisions, the focus must be on maximising the EU’s influence in this sector and becoming a technological leader. Only with this approach can the EU protect itself from these risks, ensure the security of the bloc and the prosperity of its industries.
The EU should therefore focus its efforts on three strategic policy objectives:
– boosting innovation within the bloc to ensure control and access to cutting-edge technology
– using the EU’s regulatory power to ensure the use and adoption of safe, responsible and accountable technologies both in the EU and around the world
– protecting technology-dependent industries from supply chain disruptions and the use of facilities as a weapon.
However, each of these objectives comes with its own trade-offs
On the one hand, light regulation could encourage innovation but fail to protect citizens’ rights.
On the other, excessive regulation can discourage innovation and lead companies to relocate to other jurisdictions. Similarly, prioritising economic security could increase the EU’s strategic autonomy, but in the long run it may slow growth and limit the EU’s technological leadership.
The first challenge for the EU’s next term will therefore be to understand these trade-offs and make clear decisions focused on developing its technological power. The second challenge will be to harness this power to maximise its global influence through a proactive global technology strategy.
Europe’s technology commitments
When it comes to driving technological innovation, the EU is still far behind. Europe is home to 7 cutting-edge AI models, while China has 20 and the US 109. In semiconductors, the EU relies on Asia for 75-90 per cent of its supply. And the EU’s top seven tech companies are twenty times smaller than their US counterparts in terms of total share value.
Critics argue that this is due to the trade-off between the EU’s goals of fostering innovation on the one hand and ensuring the responsible use of technology on the other.
The previous European Parliament passed numerous security rules aimed at protecting Europeans from the risks that critical and emerging technologies pose to the right to privacy, freedom of expression and protection from discrimination.
Industry advocates see this as creating a restrictive environment for technological innovation. However, even before the EU introduced technology-based rules, the European tech industry was lagging behind the US.
Structural issues such as the fragmentation of the EU single market and a wide range of government decisions on education, immigration, intellectual property, taxation and antitrust laws have stifled technological innovation in Europe far more than poor regulation.
Moreover, not all innovation is beneficial to the well-being of European citizens or promotes the EU’s influence abroad, as increasingly seen by academics, journalists and even senior executives at large tech companies – an effect that regulation is intended to mitigate.
Indeed, acting quickly and breaking the mould is not always a desirable political goal. Deregulation is therefore perhaps not the answer to this trade-off problem, and a more comprehensive strategy is needed.
Trade-offs are also likely to emerge between the EU’s goal of boosting innovation and its goal of protecting technology-dependent industries, from AI companies to public infrastructure.
The EU could import critical and emerging technologies cheaply to foster growth and technological change.
However, this would make the bloc more dependent and vulnerable to disruptions in the flow of products, services or data.
Instead, the EU has rightly chosen to protect its industries by investing in the development of critical and emerging technologies and building long-term resilience.
It has adopted an industrial policy approach in areas that require large capital investments, for example with the European Chip Act, which aims to protect the semiconductor industry.
This is done by mobilising public and private investments for advanced chip facilities and microchip research and development. At the same time, Parliament approved an economic security strategy to reduce the risk of the bloc’s dependencies on critical and emerging technologies.
Policymakers in Brussels and member state capitals have multiple tools at their disposal
to further balance these trade-offs and boost the bloc’s tech sector. Ultimately, the EU’s next mandate must strive to build a resilient tech industry, both to technological disruptions and the risks they pose to human rights.
To achieve this, policy options include funding research and innovation, subsidising tech industries, making the internal market more competitive and attractive to businesses and investors, launching visa programmes that attract technical talent and passing EU-wide regulations that prioritise the adoption of responsible technologies.
How the EU can become a tech leader
Even if Brussels manages to navigate these trade-offs and build a resilient tech industry, it will still need a strategy to achieve global influence and prevent other actors with different views on technology, security and rights from limiting the EU’s options.
The EU once pushed its values into global tech governance through the “Brussels effect,” meaning that the power of EU consumers and its internal market forced private companies to enforce its tech rules globally.
This was the case with the General Data Protection Regulation, in which the EU set the international standard for data privacy. But this was at a time when technology was not yet on the geopolitical radar or the subject of as much dispute as it is now.
Countries interested in dominating these technologies are now likely to depart from the Brussels effect and set their national rules and regulations following alternative examples.
For example, three different approaches to AI regulation have emerged between the EU, the US and the UK, offering other countries alternative options.
At the same time, critical and emerging technologies such as AI, semiconductors and quantum computing have become the central object of competition between the US and China, thus drawing the EU into a set of high-voltage geopolitical tensions around the control and deployment of these technologies.
The EU works with like-minded allies
Aware of the need to cooperate with other democracies in the governance of emerging technologies in order to spread and safeguard their values, the EU works with like-minded allies.
The EU should continue to use existing fora, such as the G7, the OECD and, above all, the EU-US Trade and Technology Council, to establish a common understanding that ensures safe and responsible uses of technology and protects European technology-related industries.
At the same time, European policymakers must be aware that aligning with the US on critical and emerging technologies necessarily involves tensions
The EU’s decision to halt ASML’s high-tech semiconductor exports to China, influenced by US pressure, highlighted how exposed Brussels is to Washington’s demands.
This does not mean that the EU has no interest in helping the US curb China’s advances in this field, but it must be able to make such decisions on its own.
This will be especially important if Donald Trump wins the US presidential election and promotes policies contrary to EU interests.
Therefore, while cooperating with its partners to enforce global standards, the EU must be able to protect its critical and emerging technologies from US actions that put them at risk.
For example, the European semiconductor value chain relies heavily on US intellectual property rights.
By replacing these rights with European alternatives, the EU can build its own bargaining power in this field and ensure that technological ties with the US remain mutually beneficial.
Ultimately, the EU must be more proactive and move away from relying on the Brussels effect to become an assertive global player. For such a shift to occur, a two-phase process is necessary.
First, Europe must develop its technological power and then use this leverage to become an influential global player.
To achieve success in both, EU policymakers will have to face complex trade-offs and rising geopolitical tensions, but what is at stake is nothing less than Europe’s economic growth and security. It is up to the new EU Parliament to take effective action.
How Technology Is Changing the Economic Development Landscape
The following contribution is from the Research FDI portal, which defines itself as: Our experienced team of economic development and research consultants has generated business opportunities and investment projects for more than 700 economic development organizations. We put our clients in front of corporate decision makers looking to expand or relocate their organizations to a new geographic location. We focus on helping our clients create important business relationships that will serve to increase knowledge of their region, promote their economic strengths, and increase direct investment.
Authorship is by the team.
Without a doubt, technology has an immense impact on every facet of our lives. From daily tasks to social functioning, technology serves as a catalyst for change, and economic development is no exception.
It is reconfiguring work processes, production methods, and consumption patterns.
Technology not only drives innovation and fosters growth opportunities, but also presents challenges to the traditional models of economic development that professionals are accustomed to.
As we move forward, technology will continue to shape the landscape of economic development, offering new prospects for businesses and individuals while introducing new obstacles. This article explores the various ways in which technology is changing economic development.
The Impact of Technology on Industries
Recent advances in technology have had transformative impacts on all industries, either directly or indirectly.
In order to stay competitive and thrive in an evolving economy, industries have had to adapt to these technological advances, leading to changes in the way many industries operate.
Technology-driven impacts such as automation and digitalization
Have revolutionized processes, disrupted traditional industries, and led to significant job displacement.
While the increasing importance of data and analytics has demonstrated the key role technology now plays in decision-making and reshaping the business landscape,
Automation and Job Displacement
Automation has been a key impact of technology on most industries and has caused significant job displacement in the economy as a result.
Driven by advances in robotics and artificial intelligence, routine and repetitive tasks have been able to be automated and completed through technology, increasing efficiency and productivity and leading to short-term job losses due to the resulting lower demand for manual labor.
However, despite the impacts on job displacement, automation has also created opportunities to train and upskill workers to take on higher-value tasks and jobs that require uniquely human skills, fostering a shift in the composition of the workforce.
The digitalization of industries and the emergence of new business models
The digitalization of industries, driven by technological advances, is transforming traditional processes into digital workflows, allowing companies to streamline operations, improve customer experiences, and develop new business models.
While this shift has disrupted traditional industries such as media, retail, and transportation, it is also creating new opportunities for companies to leverage digital platforms, cloud computing, and data analytics to improve efficiency, personalize offerings, and explore innovative revenue streams.
Changes in production and distribution processes
Technology has also revolutionized the production and distribution process, with advanced manufacturing technologies such as 3D printing reducing prototyping costs, speeding up production, and enabling customization.
These changes are improving efficiency, reducing costs, and increasing market reach for many industries, while facilitating global e-commerce, allowing businesses to reach customers worldwide, and reshaping traditional retail models.
The growing importance of data and analytics in decision-making
In many industries, technology has exponentially increased the importance of data and analytics in decision-making.
Evolving technologies, such as big data analytics, machine learning, and predictive modeling, provide valuable insights for businesses, allowing organizations to optimize operations, target customers, and develop informed strategies based on data-driven analytics, enabling businesses to better adapt to market changes and improve customer satisfaction.
The impact of technology on creating new growth opportunities
In addition to transforming industries, technological advancements have had a major impact on creating new growth opportunities in economic development.
As businesses strive to remain competitive and thrive in the evolving economy, technology-driven avenues for growth have emerged, leading to the establishment of a new digital economy, fostering new markets and collaboration and enhancing communication and remote work.
Growth of the digital economy:
Advances in technology have fueled the rapid rise of the digital economy, where business is predominantly conducted online, opening up new avenues for economic activity, allowing businesses to reach global markets and customers with ease.
The digital economy is also providing new opportunities for entrepreneurs, small businesses, and established companies to expand their reach and scale.
New markets and customers in an increasingly connected world:
As technological advancements continue to increase the connectivity of the world, businesses are able to access new markets and customers.
Through targeted marketing and personalized customer interaction on digital platforms, businesses now have greater access to consumers beyond their regions, creating new opportunities for export-oriented growth.
Improved access to information, resources, and services:
Access to information, resources, and services, largely driven by technological advances, has also created new opportunities for growth by leveling the playing field for businesses and individuals.
There is greater access than ever to a variety of educational, research, and knowledge resources. As a result, businesses can innovate and compete more effectively.
Improved communication and collaboration:
Communication and collaboration capabilities have advanced significantly with technological advances.
Fueled by the rise of communication platforms, businesses can better connect, operate efficiently, and engage in virtual teamwork.
This new ability to easily connect and collaborate has increased productivity, accelerated decision-making, and fostered cross-border partnerships.
These advances in communication and collaboration capabilities have also opened up new possibilities for remote work, creating new employment and entrepreneurship opportunities.
The challenges technology poses to traditional models of economic development
While the impact of technology on industries and growth opportunities in economic development may seem obvious, technological advances also pose challenges to traditional models of economic development, and these challenges are often less obvious.
Technological advances are leading to changes in traditional models of employment, development, and governance, and these changes pose significant challenges to traditional models of economic development.
The gig economy, which relies heavily on short-term contracts or freelance work rather than permanent employment, has been on the rise due to technological advances and poses challenges to traditional models of employment.
While the gig economy offers more flexibility and independence to those within it, workers lack the job security, benefits, and legal protections afforded to traditional employees.
This is leading to greater income inequality and disrupting traditional labor markets.
Similarly, traditional employment models are also being disrupted by the increased importance of human capital and technology skills.
Digital literacy, technological competence and adaptability are essential in today’s workforce, creating challenges for those with limited access to education and training in these fields. This is creating new inequalities and barriers to participating in the digital economy.
Traditional models of development are also changing due to technological advances, with the digital divide and inequality becoming pressing concerns.
The need for digital infrastructure is greater than ever, and the lack of it in many places is threatening development.
As unequal access to digital technologies worsens existing social and economic disparities and restricts opportunities for education, employment, healthcare, and civic participation, it also jeopardizes economic development efforts.
Finally, traditional models of governance in economic development face challenges, as the rapid pace of technological change requires government adaptation to the digital age. Governments are forced to adapt their policies and regulations to keep pace with rapid technological advances, and often these regulations do not keep pace with technology.
Looking ahead: how technology will continue to shape economic development
There is no doubt that technology will continue to shape the landscape of economic development in the years to come. Embracing evolving technologies and coping with the various changes they bring will require active efforts by governments, businesses, and individuals. Recommendations to address these changes will require collaboration, lifelong learning, regulatory adaptation, digital inclusion, and ethical considerations.
Collaboration and partnerships of governments, businesses, and individuals can drive innovation, address societal challenges, ensure inclusive growth, and leverage collective expertise and resources to address technological changes.
Furthermore, to keep up with the ever-evolving labor market, people will need to prioritize continuous upskilling and remain relevant, which must be supported by governments and businesses through investments in education and training programs that equip people with future-proof skills.
Governments must take the lead in adapting policies and regulations to keep pace with technological advances, ensuring a balance between innovation and the public interest, fair competition, and consumer protection. Alongside regulatory adaptation, governments must also make efforts to minimize the digital divide, ensuring inclusive access and encouraging businesses to design their products and services to include diverse user needs and demographics.
Finally, as technology becomes more important in all aspects of our lives, it is crucial that governments, businesses and individuals focus on ensuring that the ethical implications of their actions are considered.
While technology will not only become more important in our everyday lives, addressing these changes will require efforts from governments, businesses and individuals
These efforts will be key to harnessing the benefits of technology while ensuring inclusive and sustainable economic development.
Implications of the future of Big Tech in Europe
The following contribution is from the SwissCore Contact Office for European Research Innovation and Education portal and is authored by the team.
A foresight report explores different scenarios for Big Tech in 2040 and derives policy recommendations for EU research and innovation policy.
The European Commission published a foresight report on the future of Big Tech in Europe, focusing on the implications for research and innovation (R&I).
The publication follows a scenario-based approach, from which it draws different conclusions that formulate policy recommendations on EU R&I policy. The policy report projects scenarios up to 2040.
In this analysis, Big Tech is referred to as the largest corporations that prioritise high technological intensity as a key pillar of their business development.
Furthermore, the term is often associated with the American GAFAM corporations (Google/Alphabet, Apple, Facebook/Meta, Amazon, Microsoft) or the Chinese BATs (Baida, Alibaba and Tencent).
These large private Big Tech companies are based in research and development and impose an unprecedented influence on production and consumption relations, due to their oligopolistic position.
Are they beneficial to society or not?
Their intermediary functions in the socio-cultural, political and scientific fields, combined with their demand for resources, ultimately raise the question of whether Big Tech’s influence is beneficial to society.
In light of this development, the EU is faced with several fundamental agenda-setting questions
The relevance of Big Tech developments for EU R&I policy is exemplarily illustrated by the private funding provided through Big Tech corporations.
In a single year, the top five Big Tech companies allocated more than twice as much financial support to R&I compared to the EU-designated funding for Horizon Europe 2021-2027, which amounts to €95.5 billion.
The report presents four different scenarios showing how some of the current trends around Big Tech companies might evolve over the next two decades.
These scenarios are presented without any reference to desirability or likelihood, and serve only as strategic habitats for deriving policy options.
This approach aims to show how EU policies might have to be modified to avoid or anticipate some of the outcomes described in the respective scenarios.
The scenarios are organized along two key dimensions: the degree of openness in international interactions and the inclination toward economies of scale, scope, and network based on extensive research and development.
In the first scenario, “All Tech Winners,” big tech firms dominate, replacing traditional markets and raising concerns about concentration, competition, and privacy in Europe.
The second scenario, “Pax Technologica,” imagines Europe negotiating a multipolar technology landscape through strong regulations, striking a balance between innovation and consumer protection.
The third scenario, “Re-matching,” sees a diversified technological catch-up in Europe, with viable alternatives to big tech firms emerging and an ongoing productive investment supercycle.
The fourth scenario, “Stealth Liberalism,” depicts a decentralized, bottom-up approach that fosters a competitive European technology landscape, requiring adaptability of the regulatory framework and promoting individual innovation and economic freedom.
Developing its own technology leaders
The main conclusions of this report, described as cross-cutting policy recommendations across all the scenarios mentioned, are that the European Union should prioritise the development of its own technology leaders alongside regulatory efforts.
The report suggests comparing EU and national R&D budgets with the historical performance and strategies employed by global technology giants. Furthermore, it emphasises the need for significant “big-bet” investments in Europe, alongside an experimental approach that encourages serendipitous breakthroughs in technology and research.
How the EU is cracking down on Apple, Google and other big tech
The following contribution is from the Reuters Agency portal and is authored by the team.
European regulators have launched a series of investigations into Big Tech in recent years. Here are some of the measures taken:
DIGITAL MARKETS ACT
The European Union’s Digital Markets Act (DMA) came into force in 2022 with the aim of curbing the power of Big Tech and ensuring a level playing field for smaller rivals.
Apple (AAPL.O), opens new tab is set to be fined under the act, making it the first company to be sanctioned, sources with direct knowledge of the matter said on Nov. 6. The fine is likely to come in November, although the timing could still change, the sources said.
The investigation into Apple is part of three probes launched by the European Commission, which acts as the EU’s competition watchdog.
The EC is also investigating Alphabet (GOOGL.O), opens new tab Google for possible infringements and accused Meta (META.O), opens new tab in July of failing to comply with the DMA in its new paid-or-consent advertising model.
In September 2023, the EU designated 22 “gatekeeper” services run by Alphabet, Amazon (AMZN.O), opens new tab Apple, Meta, Microsoft (MSFT.O), opens new tab and TikTok-owner ByteDance, giving them six months to comply with the DMA provisions.
Meta and TikTok appealed against gatekeeper status in November, with the latter losing a bid to have its designation suspended in February. Apple said in April it would continue to engage with the Commission to comply with the rules.
DIGITAL SERVICES ACT
Tech companies are required to do more to tackle illegal and harmful content on their platforms under the EU Digital Services Act (DSA) that came into force last year.
Facebook and Meta’s Instagram are being investigated for possible breaches of EU online content rules related to child safety, which could lead to heavy fines, the Commission said in May.
On November 14, the European Commission fined Meta (META.O), opens new tab €797.72 million for abusive practices to benefit Facebook Marketplace.
On September 18, Google won its challenge to a €1.49 billion ($1.66 billion) antitrust fine imposed five years ago for hampering rivals in online search advertising.
A week earlier, on September 10, Google lost its fight against a €2.42 billion ($2.7 billion) fine imposed by EU antitrust regulators seven years ago for using its own price comparison shopping service to gain an unfair advantage over smaller European rivals. On the same day, Apple lost a fight against an order from EU competition regulators to pay 13 billion euros in back taxes to Ireland, as part of a broader crackdown on preferential deals between multinationals and EU countries.
Regulators said in July that Apple had agreed to open up its tap-and-go mobile payments system to rivals to settle an EU antitrust probe.
Brussels fined Apple 1.84 billion euros in March for thwarting competition from music streaming rivals through restrictions on its App Store.
In June, the Commission accused Microsoft (MSFT.O), open new tab, of illegally bundling its Teams chat and video app with its Office product. It is also investigating Microsoft’s security software practices, a document seen by Reuters showed in February.
EUROPEAN STATES
Some individual European countries have also taken action against big tech companies. Britain’s antitrust regulator on Sept. 6 provisionally found that Google had abused its dominant position in digital advertising to restrict competition. A month earlier, it launched investigations into parent company Alphabet and Amazon’s collaboration with artificial intelligence startup Anthropic.
Other measures include a fine against Meta in Italy for unfair business practices and a French fine against Google for breaching EU intellectual property rules.
Meanwhile, a Spanish regulator opened an investigation into possible anti-competitive behavior by Apple’s App Store in July.
Big changes for Apple, Google and other tech giants: Sweeping EU law takes effect today
The following contribution is from CNN Business and the author is Brian Fung who is a technology journalist covering the intersection of business and policy.
Europeans who use Apple, Google and other major tech platforms woke up to a new reality Thursday as a landmark law imposed tough new competition
The new EU rules force sweeping changes to some of the world’s most widely used tech products, including Apple’s app store, Google’s search and messaging platforms such as Meta’s WhatsApp.
And they mark a turning point in a global effort by regulators to put tech giants in their place after years of accusations that the companies were harming competition and leaving consumers worse off.
The sweeping obligations apply only to the EU
Which could leave tech users in the US and other markets looking longingly at some of the features that big tech is rolling out in response to the European directive.
In a radical shift to comply with the law, Apple said it plans to allow EU users to download iPhone apps through third-party app stores, easing its grip on iOS for the first time since the App Store debuted 15 years ago.
In another significant change, Google said it will tweak search results to drive more traffic to independent sites
for comparison shopping or travel booking, rather than directing users to Google Flights or other tools it owns.
Google will also let Android users select a preferred browser and search engine from a menu of options when they first set up their devices, rather than having users default to Google’s Chrome browser and search engine.
That could give an advantage to rival browsers like Mozilla’s Opera or Firefox and competing search engines like DuckDuckGo or Microsoft’s Bing.
Meanwhile, users of messaging apps like Signal or Viber could soon be able to send chat messages directly to people using Meta’s Messenger and WhatsApp platforms, under a new openness requirement imposed on the social media giant.
And streaming services like Spotify and Netflix could market discounts
inside their apps to those who buy subscriptions through the services’ respective websites rather than through proprietary in-app payment systems previously imposed on app developers by app stores.
The EU edict
The industry-wide changes are tied to the Digital Markets Act (DMA), a 2022 law that requires dominant online platforms to give users more choice and rivals more opportunities to compete.
Its sweeping obligations affect six of the world’s largest tech companies: Amazon, Apple, Google, Meta, Microsoft and ByteDance, TikTok’s parent company.
By mid-May, that list could also include Elon Musk’s X and Booking.com, the European Commission said this week.
Violations of the DMA can lead to stiff penalties, including fines of up to 10% of a company’s global revenue and up to 20% for repeat offenders. For most regulated companies, that would translate into tens of billions of dollars.
The Apple Music app for download in the Apple App Store on a smartphone in New York, US, in June 2021.
For years, policymakers around the world have accused tech giants of monopolizing digital markets and using consumers’ personal data to entrench their power or identify new markets to dominate.
Tech giants, for their part, have insisted they compete vigorously, created valuable opportunities for entrepreneurs and unlocked billions of dollars in economic activity.
Europe’s sweeping new rules underscore skepticism of that defense and show how the EU has led the charge on tech regulation globally, sometimes with ripple effects for the rest of the world.
The trading bloc has passed other sweeping laws in recent years that regulate digital privacy, social media and, soon, artificial intelligence
Some of its regulations have had broader impacts: In 2022, a new EU law requiring Apple to use USB-C as the charging standard for mobile devices prompted Apple to adopt the standard for all of its new iPhones, even in the United States.
Targeting certain gatekeepers
Europe’s new competition law doesn’t directly target the six companies mentioned. Rather, it says that companies that meet a specific size threshold must abide by certain “gatekeeper” rules to prevent them from abusing their enormous economic power.
One way the EU plans to regulate that power is by giving consumers more control over how tech giants use their personal information.
Under the DMA, EU citizens will be able to opt out of sharing their usage history of an app with other apps owned by the same company.
For example, Google users will be able to prevent their search and browsing histories from being shared with Google’s YouTube video platform, which could affect which videos YouTube suggests to users.
Meanwhile, Amazon will need consumers’ consent before using their Prime Video, Kindle or Audible usage history to create targeted recommendations or ads on its e-commerce marketplace.
Europe’s first-of-its-kind digital competition law stands in contrast to the United States
Where proposals to regulate the tech industry have repeatedly failed. Some of the DMA’s ideas have been replicated in U.S. legislation, but they have failed to pass amid industry opposition and the usual congressional gridlock.
While the law could increase demand for tech companies to extend EU-specific features to other markets, few platforms have shown signs that they plan to do so.
For example, Apple’s app store plans for Europe differ significantly from changes to its U.S.-based app store that it was forced to make as part of an antitrust lawsuit involving “Fortnite” creator Epic Games. Apple has given no indication that it will harmonize the two sets of policies.
Consumer groups say the DMA promises to lower prices for Europeans by forcing platforms to open up and requiring them to compete on a level playing field.
“We have worked very hard at the EU level to get this law passed to improve digital markets for the benefit of consumers,” said Agustín Reyna, legal director of BEUC, a coalition of EU-based consumer advocacy organizations.
Tech companies oppose it
But some tech companies have opposed the DMA, warning that it could have unintended consequences.
Google, for example, argued this week that its changes to search results in response to the DMA could drive more searches to travel or restaurant listing aggregators rather than to individual hotels, airlines, restaurants and retailers.
It also warned that because of new requirements around data sharing, many of Google’s recommendation features “will no longer work the same way,” suggesting that life could become less convenient for users who revoke their consent.
Meanwhile, Apple has said that requirements to support third-party app stores could expose iOS users to greater amounts of malware or spam, because of Apple’s weakened control over app developers.
“The new options we are introducing to comply with the DMA necessarily mean that we will not be able to protect users in the same way,” Apple wrote in a technical report it published last week ahead of Thursday’s compliance deadline.
“The changes the DMA requires will inevitably cause a gap” between the security of EU users and the security enjoyed by Apple users outside the EU, it added.
That may have a grain of truth, but DMA advocates have said it can be difficult to determine where legitimate objections to the law end and self-interest begins.
As companies begin to comply with the letter of the DMA, expect some to try to evade its spirit by using consumer scare tactics or “dark patterns” — subtle interface designs meant to nudge users into sharing more of their data or making other choices a company prefers, Reyna said.
“These include misleading language like ‘use it for free’ when consumers pay [for a service] with their data,” BEUC wrote in a report last week.
“Data protection options are buried in a maze of settings, and the use of contrast and colors for ‘accept’ and ‘decline’ buttons can steer users toward the response the gatekeeper desires.”
Some companies are already accusing tech giants of breaking the law
On Wednesday, Epic Games released emails showing that Apple blocked its request this month to launch a third-party app store on iOS in Europe.
In a complaint to EU officials, Epic said Apple justified the decision by referencing Epic’s previous deliberate violation of Apple’s app store terms and Epic’s public criticism of Apple.
If Apple’s decision is allowed to stand, it will mean that tech giants can thwart competition and undermine the law simply by pointing to a rival’s past efforts to call out anti-competitive behavior, said Tim Sweeney, CEO of Epic Games.
Previous rulings by US courts have upheld Apple’s right to cut ties with Epic for any reason, Apple said in a statement. «In light of Epic’s past and current behavior, Apple chose to exercise that right.»
The European Commission has asked Apple to explain its actions under the DMA, a Commission spokesperson told CNN on Thursday. The EU executive body is also assessing whether Apple’s actions «raise doubts about its compliance» with other EU rules, the spokesperson added.
Compliance deadline
Thursday’s deadline is the last chance for watchdog companies to submit detailed plans to the European Commission showing how they will comply with the DMA.
After reviewing the plans, which could take weeks or months, the commission can choose to launch investigations into companies suspected of noncompliance. Those investigations could last up to a year.
Even after the plans are reviewed, the commission could still launch compliance investigations at any time, particularly if it receives complaints from the public.
The Computer and Communications Industry Association (CCIA), a trade group representing four of the six watchdog companies (Amazon, Apple, Google and Meta) told CNN that «regulators must resist the temptation to politicize the process» of reviewing the plans.
The application of the DMA “should be proportionate and impartial, taking into account the significant differences between gatekeepers as well as the actual functioning of these services,” said Daniel Friedlaender, senior vice president of the CCIA and head of its European office.
Friedlaender warned that the DMA could also frustrate consumers by leading to “product updates they don’t want” or that they might see “changes to their favorite services that they don’t really like.”