EU Establishes Sweeping Digital Law To Curb US' Big Tech Giants' Power

EU Establishes Sweeping Digital Law To Curb US' Big Tech Giants' Power

The European Union is stepping up its crackdown on Big Tech companies through a set of landmark digital rules to rein in their power.

Big Tech companies will now face a new set of rules established by the European Union, which hopes to set the landmark "Digital Markets Act" that will rein in the power of online "gatekeepers" such as Google and Meta, Facebook's parent company. The sweeping digital law was designed to protect consumers and level out the playing field for possible rivals.

ABC News reported that on Thursday, EU officials agreed on wording for the "Digital Markets Act," which was described as a "part of a long-awaited overhaul of its digital rulebook." The sweeping digital law will require other approvals but seeks to prevent Big Tech companies from dominating digital markets. The digital law also establishes fines and the possibility of a company breakup in the face of violations.

The digital law establishes tighter restrictions on Big Tech companies and how they use people's data for targeted online ads, which is the main revenue source for the likes of Google and Facebook. The digital law will also require different messaging services or social media platforms to work together.

"What we have been deciding about yesterday will start a new era in tech regulation," Andreas Schwab, the European Union's lead lawmaker, said in a press conference on Friday.

Al Jazeera reported that Schwab explained further, "The agreement ushers in a new era of tech regulation worldwide. The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies."

Specifically, the "Digital Markets Act" will require Apple to open up its App Store to alternative payments systems, a move that has long been opposed by the iPhone manufacturer. Another target of the sweeping digital law is Google, which will be forced to offer Android-run smartphone users alternatives to its search engine, the Google Maps app or its Chrome browser.

A Google spokesperson responded to the demands of the "Digital Markets Act" or DMA, commenting that "While we support many of the DMA's ambitions around consumer choice and interoperability, we remain concerned that some of the rules could reduce innovation and the choice available to Europeans."

Under the sweeping digital law, Apple will also be forced to allow iPhone users to uninstall its homegrown Safari web browser and other company-imposed apps that users cannot remove at the moment. Apple expressed opposition against the law, saying that it was "concerned that some provisions of the DMA will create unnecessary privacy and security vulnerabilities for our users."

Big Tech companies that violate the DMA will face fines up to 10% of a company's annual global sales and even up to 20% for repeat offenders. Big Tech companies have also significantly lobbied against the new rules, with its defenders in Washington decrying how the law unfairly targets mostly American companies.

The DMA targets "gatekeepers" of the internet, which definition has been revised to include organizations that earn at least $8.3 billion in annual revenue in Europe for the past three years and companies that have a market value $8.3 billion, provide services in at least three EU countries, have 45 million users and 10,000 business users annually in the bloc. The "Digital Markets Act" will then have to be endorsed by the  Council and the European Parliament.