How Digital Markets Act will give the EU more power to rein tech giants

Europe has announced an agreement on the upcoming Digital Markets Act (DMA) between the European Parliament and EU member states. The move is aimed to offer an equal and level playing field among tech companies who want to compete in the EU. The DMA is also aimed to ensure that European citizens have the benefit of choice.

The DMA will enable the Commission to carry out market investigations and sanction non-compliant behaviour and ban certain practices used by large platforms acting as “gatekeepers”.

The legislation is expected to come into effect around October after the legislation is been approved by the Council and the Parliament. To ensure interoperability, companies operating complex messaging apps are expected to be given a grace period. However, interoperability could pose a complex tech challenge for companies, but they have a strong incentive to comply.

Both Parliament and Council will approve the DMA after the legal text is finalised at technical level and checked by lawyer-linguists. After completing the process, DMA will come into force 20 days after its publication in the EU Official Journal.  The rules will apply after six months.

What is DMA

It is an EU law concerning the regulation of online platforms including Facebook Messenger and Apple’s iMessage. With the implementation of this rule, tech giants such as Meta and Apple will have to ensure that consumers using these services can exchange messages, photos and videos among all messaging apps, both big and small.

Provision of fine

Failing to oblige the upcoming DMA, fine upto 10% of their global annual revenue can be imposed which can be doubled for repeated infringements. In case of systematic infringements, the Commission may ban them from acquiring other companies for a certain time.

The upcoming DMA is believed to benefit consumers in Europe and smaller tech businesses operating in the region.

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