EU targets Big Tech with Controversial New DMA Law
The European Union has prepared the final draft of a new law to stop the arbitrariness of tech companies like Facebook, WhatsApp. Through this, things like banning active criminal activity, misuse of users’ data for their own benefit will be stopped. Also, tech companies that break this law will be fined. Which will be according to their earnings. Even after imposing the fine, if the company does so, then this fine will increase on them.
Small messaging platform companies will also get priority
The European Union has introduced a new law to balance the competition in the tech world. It is named Digital Market Act (DMA). Its purpose is to rein in large technologies and allow smaller firms to compete with them. The act focuses on the interoperability of messaging apps such as WhatsApp, Facebook Messenger and iMessage, with the European Union saying that larger companies will have to work in tandem with smaller messaging platforms. This will give users more options to send messages. Users will be able to select their browser, search engine for free.
App with 45,000 active users will be considered as Gatekeeper
With this law, the European Union will impose new obligations on companies considered to be gatekeepers. This would include firms with a market capitalization of at least $82 billion (approximately more than 6 trillion), apps or social network platforms with at least 45,000 active users. It currently includes famous tech companies like Google, Microsoft, Meta, Amazon and Apple.
Failure to comply with the rules will result in a fine of up to 20%
If the gatekeepers do not follow the rules, they will be fined heavily. In this, this penalty will be up to 10% of the business done by them in the previous year and in case of repeated violations, this penalty will be up to 20%. European Union commissioner Margrethe Vestager said the purpose of this new law is to make business in the technology sector transparent.
Till now fines on tech companies have not made any difference
The European Union has been fighting for the last decade over DMA. The law will help prevent Amazon from using its analytics to profit from third-party sellers using its platform. However, this may concern only a few companies. Often such fines are very small for tech companies. For example, when Apple’s App Store was fined in the Netherlands for misusing third-party data, it chose to pay a $5.5 million weekly fine rather than make any changes to its platform.
The Act will only apply to companies located in the European Union.
This is the reason why the Digital Market Act is being seen as a solution to this. Under this, the amount of fine imposed will increase for repeating the same mistake again and again. The penalty is increased if you do not implement the changes. This will only apply to companies located in the European Union.
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