Last week, the European Union brought in new rules that would change forever how tech giants such as Google and Apple operate in their region. The Digital Markets Act (DMA), which has been passed by EU lawmakers, will curtail the powers of tech companies to a large extent. The Act, which includes a mandatory list of dos and don’ts for the companies, will be operationalized from October 2022.
For instance, Google can no longer rank its products above the competition’s businesses. This is a huge blow for Google given that most of its apps have the highest star rating in the Andriod App store. This also means that Google reviews cannot unfairly prescribe their companies’ products and feature them over others. Also, Google search cannot list its products over the competition’s services when a customer searches for them on their platform.
Similarly, Apple has to relax its tough third-party app rules. Apple never allows its customers to install third-party software on their devices. They insist that such apps be approved by Apple before the customers can use them. However, under the new rules proposed in the DMA act, Apple won’t be able to have such a rigid structure. They will be forced to open their app stores to third-party providers without scrutiny.
These measures are a huge blow for Apple and Google. Apple takes pride in the fact that its app store is the safest marketplace and won’t give in to hacking easily. They also claim that iPhones are not much prone to malware risks. With the new rules, they have to think of additional safeguards now.
Similarly, Facebook has also been forced to follow certain guidelines. The social media giant’s messenger service WhatsApp usually does not allow interaction with other messaging services. But under the new rules under the DMA act, they now have to make provisions to make this possible.
After the rules come into play, Amazon will not be able to promote its products on its platforms. The self-written reviews that the Amazon website features about its products may also be deemed against the rules.
The harsh steps became necessary as cases against these tech giants rarely resulted in convictions. Thus, the European Union now wants to prevent mistakes rather than seek a cure by making laws against these companies.
U.S. May Join EU
After the European Union brought in these laws, the United States may follow suit soon. The justice department’s antitrust division is keen on bringing laws against big companies gobbling up start-ups. As such a move will lead to the monopolization of the tech industry, the Justice Department feels that it is not healthy for a competitive market environment.
Regulation of tech companies is of paramount importance as they influence the policies surrounding emerging technologies such as cloud computing, and virtual reality.
Tech Companies Worried
Apple has released a statement expressing concern about the sweeping changes proposed in the law. They were worried that this Act would result in various security issues for Apple product owners.
Google was cautious in their reply and welcomed many changes but raised slight objections to the hardline approach.