Two years after its proposal and after negotiations between the European Commission, the European Union and the 27 Member States, the EU is about to approve one of the laws of the legislative package published in December 2020: the Digital Markets Act (DMA, for its acronym in English). This new regulation will include a series of measures that will put an end to the unfair commercial practices of these big technology companies. But who does it affect? What benefits does it bring to small businesses and consumers?
The Digital Markets Act, in particular, will apply to all technology companies that operate in the European market and have a market capitalization of 75 trillion euros. These must also provide “basic platform service”, such as social networks, websites or web browsers, and must have traffic of at least 45,000 million active users per month. In any case, if a company meets the above requirements, it must inform the European Commission within a maximum period of 3 months.
The European Union defines this type of company as “gatekeepers” or porter for many reasons. Among them, because of its important economic position in EU member countries. Also for its “strong intermediary position” when it comes to being able to offer user information to other companies, and for its stability in the market. Some of these “guardians” are: Google, Meta (Facebook), Amazon, Microsoft or Apple. Online platforms such as Booking.com or Aliexpress, the popular Alibaba store, could also meet these requirements.
The prohibitions and obligations that the new law on digital markets brings
The objective of Digital Markets Act it’s about ending the abuse of power by big tech companies and allowing smaller companies determined to offer digital services and platforms to also gain a foothold in the market. For this, a series of obligations and prohibitions which also aim to prevent so-called “gatekeepers” from limiting the development of other companies on unfair terms. These are some of those that could arrive after the publication of the law.
- Large companies will need to allow third parties to interact with their own services.
- Small businesses will be able to access the data that companies like Google, Meta or Amazon, among others, collect when they use their platforms.
- Big tech will also need to allow smaller companies to offer their products to customers outside of other platforms. They can also do this by offering different prices and conditions.
- the big tech They will not be able to collect non-public data from small businesses that use digital platforms for use in other services or to compete with them.
- They also won’t be able to prioritize their products or services over similar ones offered by smaller businesses using their platform.
- The Digital Markets Act also prohibits large companies from blocking consumers from contacting companies outside of their platforms.
On the other hand, the Digital Markets Act will also bring significant benefits to consumers. For example, large companies they will not be able to prevent users from uninstalling an app or program which is installed by default on the system.
I am Bhumi Shah, a highly skilled digital marketer with over 11 years of experience in digital marketing and content writing in the tech industry.