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The European Union has adopted legislation to curb the powers of big tech “gatekeeper” companies that can control access to application platforms.
The legislation by the European Parliament will likely impact mobile game platform owners Google and Apple, as well as others who operate platforms.
Richard Hoeg, a lawyer at Hoeg Law, said in a tweet, “Apple is going to sue on this until the heat death of the universe.” This is a big deal as Epic Games was largely unsuccessful in a lower-court ruling in the U.S. in its case alleging antitrust violations by Apple as the owner of the iOS mobile app platform. Epic is appealing the case, in which Apple won most of the rulings and lost on one relatively small point. Tim Sweeney, CEO of Epic Games, tweeted, “Happy fifth of July.” A coalition of companies backed Epic.
We have asked Google and Apple for comment.
The Digital Markets Act (DMA) and Digital Services Act (DSA) was proposed back in 2020, and now the group has formally adopted its “digital services package” legislation.
Companies such as Apple and Google are likely to be classified as “gatekeepers” because of their size and entrenched positions in the market under the rules of the DMA. It remains to be seen what other potential gatekeepers are affected by the law.
Gatekeepers will have to abide by restrictions meant to curb anticompetitive behavior. For instance, they now have to allow users to install apps from third-party app stores and sideload directly from the internet. Epic Games is suing Apple and Google for this right, which is against platform policies.
The gatekeepers will also have to offer third-party payment systems in apps and allow developers to promote offers outside the gatekeeper’s platforms.
And the gatekeepers will have to let developers integrate their apps and digital services directly with those belonging to gatekeepers. This means they have to be able to integrate with services such as messaging, voice calls, and video calls. Developers will also get access to hardware features such as near-field communication (NFC), security tech and processors, authentication means, and software for controlling those technologies.
How consumers benefit
Developers will presumably be able to offer lower-cost services on their own web sites, escaping the platform fee of 30% of a purchase price. They could pass that on to the consumer or use the profits to improve their apps for consumers.
The EU also did some things to benefit consumers. Gatekeepers have to endure that consumers can uninstall any app and unsubscribe from core platform services. Users will have the option to change a default voice assistant to a third party option, share data and metrics with developers or platform competitors. That includes marketing and advertising performance data.
Each platform will have to set up an independent compliance group to monitor its adherence to the EU law. Gatekeepers will not be allowed to preinstall software applications and require users to use any default software such as web browsers. The gatekeepers can’t favor their own apps, products or services. And they will have to inform the EU of any mergers and acquisitions.
Regarding privacy, the gatekeepers can’t reuse private data collected during a service for the purposes of another service. And they can’t establish unfair conditions for business users.
Fines can amount to 10% of a gatekeeper’s total worldwide annual revenues (turnover), or 20% in the case of repeated violations. Other sanctions are possible.
South Korea has also implemented tough regulations for platforms, and there is talk of bipartisan legislation restricting tech giants in the U.S.