EU Grants Provisional Approval for New, Broad-Reaching ‘Digital Markets Act’

Amid ongoing debate around the importance of digital privacy, and who controls and uses our personal data for various purpose, the EU continues to lead the way with the most advanced regulation in the space. Some of that has been hugely beneficial, while some has become a hindrance in many respects. But right now, European officials are clearly enacting the biggest shifts in the broader digital privacy space.

And it looks like it’s about to force a move once again.

Today, the European Union reached provisional agreement on the new ‘Digital Markets Act’, which, among various elements, will seek to impose restrictions on how user data can be shared, while it also aims to dilute the dominance of the big tech players by enforcing more open access.

As explained by Politico:

“The new rules for so-called ‘gatekeeper platforms’, derived from years of antitrust enforcement in the digital economy, include restrictions on combining personal data from different sources, mandates to allow users to install apps from third-party platforms, prohibitions on bundling services, and a prohibition on self-preferencing practices.”

Apple, in particular, has come under scrutiny over the last point, with evidence suggesting that it’s recent ATT update, which prompts users to opt-in to app data tracking, actually ends up benefitting Apple’s own ad products, because it’s now able to collect more user data than those utilizing its platform.

In addition to this, the Digital Markets Act would also impose new interoperability requirements for messaging platforms, meaning that you’d theoretically be able to share messages between various messaging platforms freely.

“Parliament also succeeded in convincing the Council of interoperability requirements for messaging services, meaning outfits such as WhatsApp, Facebook Messenger or iMessage will have to open up and interoperate with smaller messaging platforms. For group chats, this requirement will be rolled out over a period of four years.”

That presents a range of potential implications – for privacy, digital advertising, outreach, and more.

The actual process of making this happen would take time to work through, but it could lead to a big shift in the messaging landscape, aside from the broader implications.

A key part of the proposal aims to also eliminate what the EU is calling ‘killer acquisitions’:

“The Commission might prohibit gatekeepers from engaging on acquisitions in the areas relevant to this regulation, such as digital or to the use of data related sectors e.g. gaming, research institutes, consumer goods, fitness devices, health tracking financial services, and for a limited period of time where this is necessary and proportionate to undue the damage caused by repeated infringements or to prevent further damage to the contestability and fairness of the internal market.”

Meta has been accused of using this as a strategy to quash opposition, with its acquisitions of WhatsApp, Instagram and even GIF maker GIPHY still under scrutiny in some regions.

It is also worth noting that the scope of the legislation is fairly specific, in aiming at the big players:

“To qualify as a ‘gatekeeper’, companies would also need to provide a core platform service in at least three EU countries and have at least 45 million monthly end users, as well as more than 10 000 business users. A list of indicators to be used by the providers of core platforms services when measuring monthly end users and yearly business users should be provided in an Annex to the proposed Regulation.”

Very few platforms are ever going to reach that scale, but for those that are already operating at those numbers, it could mean big changes are coming, in likely the biggest upheaval since the implementation of the GDPR in 2018.

Penalties for breaches of the new rules could reach up to 10% of a company’s annual worldwide turnover, and could go even further in the case of repeated infringements.

It’s a wide-reaching bill, which still faces some potential challenges as yet. But it has passed the first major hurdle – and while these updates would technically only apply to EU citizens, if it is enacted, there will be implementations for all platforms in all regions.

We’ll keep you up to date on any progress.