LONDON (AP) — Europeans scrolling on their phones and computers this week will get new choices for default browsers and search engines, where they can download iPhone apps and how their personal online data is used.
They are part of changes required under the Digital Markets Act, a set of European Union regulations that target six tech companies designated as “gatekeepers” – Amazon, Apple, Google parent Alphabet, Meta, Microsoft and TikTok owner ByteDance – will have to follow suit. by midnight Wednesday.
The DMA is the latest in a series of regulations that Europe has adopted as a global leader in curbing the dominance of big tech companies. Technology giants have responded by changing some of their old ways of doing business, such as Apple allowing people to install smartphone apps outside the App Store.
The new rules have broad but vague objectives to make digital markets “fairer” and “more contestable.” They come into effect as efforts around the world to crack down on the tech industry gather pace.
Here’s how the Digital Markets Act will work:
WHICH COMPANIES MUST FOLLOW THE RULES?
About 22 services, from operating systems to messenger apps and social media platforms, will be in the DMA’s crosshairs.
They include Google services such as Maps, YouTube, the Chrome browser and the Android operating system, plus Amazon’s Marketplace and Apple’s Safari Browser and iOS.
Meta’s Facebook, Instagram and WhatsApp are included, as well as Microsoft’s Windows and LinkedIn.
The companies face the threat of hefty fines worth up to 20% of their annual global turnover for repeat violations – which could amount to billions of dollars – or even the break-up of their businesses for ‘systematic violations’.
WHAT EFFECT WILL THE RULES HAVE WORLDWIDE?
The Digital Markets Act is a new milestone for the 27 countries of the European Union in its long-standing role as a global trendsetter in clamping down on the technology industry.
The bloc has previously hit Google with whopping fines in antitrust cases, introduced tough rules to clean up social media and introduced the world’s first regulations on artificial intelligence.
Now places like Japan, Britain, Mexico, South Korea, Australia, Brazil and India are enacting their own versions of DMA-style rules aimed at preventing tech companies from dominating digital markets.
“We’re already seeing copycats around the world,” said Bill Echikson, a senior fellow at the Center for European Policy Analysis, a Washington-based think tank. The DMA “will become the defacto standard” for digital regulation in the democratic world, he said.
Officials will look to Brussels for guidance, said Zach Meyers, deputy director at the Center for European Reform, a think tank in London.
“If it works, many Western countries will likely try to follow the DMA to avoid fragmentation and the risk of another approach failing,” he said.
HOW WILL APP DOWNLOADING CHANGE?
In one of the biggest changes, Apple has said it will let European iPhone users download apps outside the App Store, which will be installed on its mobile devices.
The company has long resisted such a move, with much of its revenue coming from the 30% fee it charges for payments – such as for Disney+ subscriptions – made through iOS apps. Apple has warned that sideloading apps poses additional security risks.
Now Apple is reducing the fees it collects from app developers in Europe who choose to stay within the company’s payment processing system. But it adds a $50 fee for each iOS app installed through third-party app stores, which critics say will keep the many existing free apps (whose developers currently don’t pay fees) from jumping ship.
“Why would they possibly choose a world where they have to pay a 50 cent fee per user?” says Avery Gardiner, Spotify’s Global Director of Competition Policy. “So those alternative app stores will never gain traction because they will miss out on a lot of apps that should be there to make sure customers find the store attractive.”
“That is completely contrary to the purpose of the DMA,” Gardiner added.
Brussels will closely monitor whether technology companies comply with this.
EU competition chief Margrethe Vestager said this week that, after a decade in the job, I have seen “a fair number of antitrust cases and a lot of creativity built into how we can get around the rules we have.”
HOW DO PEOPLE GET MORE OPTIONS ONLINE?
Consumers will not be forced to make default choices for important services.
Android users can choose which search engine they want to use by default, while iPhone users can choose which browser they want to use. Europeans will see choice screens on their devices. Microsoft, meanwhile, will stop forcing people to use the Edge browser.
The idea is to avoid pushing people into using Apple’s Safari browser or Google’s Search app. But smaller players still fear they will be worse off than before.
Users may just stick with what they recognize because they don’t know about the other options, says Christian Kroll, CEO of Berlin-based search engine Ecosia.
Ecosia has urged Apple and Google to include more information about competing services in the selection screens.
“If people don’t know what the alternatives are, it’s quite unlikely that many of them will choose an alternative,” Kroll said. “I’m a big fan of the DMA. I’m not sure yet whether it will deliver the results we hope for.”
HOW WILL INTERNET SEARCH CHANGE?
Some Google search results will appear differently because the DMA prohibits companies from favoring their own services.
For example, searches for hotels will now show an additional ‘carousel’ from booking sites such as Expedia. Meanwhile, the Google Flights button on the search results display will be removed and the site will be listed among the blue links on the search results pages.
Users also have options to avoid being profiled for targeted advertising based on their online activities.
Google users will be given the choice to prevent data from being shared across the company’s services so they can be better targeted with ads.
Meta allows users to separate their Facebook and Instagram accounts so that their personal data cannot be combined for ad targeting.
The DMA also requires that messaging systems can work with each other. Meta, owner of the only two chat apps covered by the rules, is expected to come up with a proposal on how Facebook Messenger and WhatsApp users can exchange text messages, videos and images.