DMA will constitute a 'paradigm shift in digital markets,' say rivals.
The world's leading tech, ecommerce, and social media companies have until March 7, 2024, to comply with the European Commission's Digital Markets Act which requires them to demonstrate their commitment and plans to end any anticompetitive behaviors. Branded by the EC as digital platform market "gatekeepers," Google, Amazon, Apple, Meta, Microsoft, and TikTok owner ByteDance, they operate 20 "core platform services" as defined by the Commission, i.e., search engines, online intermediation services, social networks, video sharing platforms, communication platforms, advertising services, operating systems, and cloud services.
Smaller competitors – whose brands are not household names in the U.S. but figure prominently in Europe – banded together to prod the gatekeepers toward compliance, expressing in an open letter fear of a "lack of effective engagement" by the corporate giants and urging them into a dialogue to get in line with the spirit of the law. The letter was dated Jan. 16 and was posted on the LinkedIn page of Paris-based Adevinta CEO Antoine Jouteau, among other places.
"The DMA will affect how millions of consumers and business users interact with social networks, app stores, online shopping, video sharing services, mobile phones, personal messaging services, online search engines, etc.," the letter reads. "It will constitute a paradigm shift in digital markets with one fundamental objective: the creation of fair and contestable digital markets in Europe. It should put an end to anticompetitive practices that led to higher prices for consumers and slowed innovation in Europe."
The EC and the European Parliament have asked the gatekeepers to submit draft compliance solutions ahead of the deadline to allow time to consult with business users and consumers, the letter says. As of Jan. 16, the smaller competitors felt engagement by the gatekeepers was underwhelming.
The signers are: Adevinta, Allegro, Billiger.de, Ceneo,
CompareGroup, Ecosia, Element, Favi, Heureka Group, Idealo, Kelkoo,
Ladenzeile, Le Guide.com, OLX, Open-Xchange, Panther Holding GmbH,
Preis.de, Prisjakt, Proton, Qwant, Runnea, Schibsted, Solute, and
Vipps.
Google worried about 'difficult trade-offs.'
On Jan. 17, the day after the open letter was posted, Google issued a statement saying it has been
working hard in advance of the DMA deadline, testing and rolling
out product changes, seeking feedback on changes from the EC and
"stakeholders like developers, advertisers and companies who
will be affected by them." Google says that while it supports
"many of the DMA's ambitions around consumer choice and
interoperability," it warns of "difficult
trade-offs" that could reduce choices for services in
Europe.
Google says it will seek additional consents from consumers for
linked services, intended to give users more control over data that
is shared across Google products and what content and ads are
surfaced. It plans to include new information, like photos,
pricing, and links to price-comparison services, in results for
accommodations and products. Today, Android users can switch
default search engines or browsers. Under the DMA, Google and
others will need to show additional choice screens. Also, Google
says it will meet new data portability requirements.
A few days later, Meta issued its update on efforts to comply
with the DMA, saying "people using Instagram and Facebook in
the EU, EEA and Switzerland will be offered more choices about how
they can use our services and features." Meta says it is
"investing significant resources to offer users these choices
and to ensure our ongoing compliance." For information used
between Facebook and Instagram, consumers who have already chosen
to connect accounts will be able to continue to do so through the
Accounts Center, or manage their accounts separately so that their
information is no longer used across accounts. Meta also signaled
changes relating to Facebook Messenger, Marketplace, Gaming, and
Ads.
While there is no evidence that Google and Facebook were moved to issue their statements, the timing just hours and days after the smaller competitors voiced concerns suggest their letter at least grabbed some attention.
As for Microsoft, according to reports, including one by Kevin Okemwa for WindowsCentral.com, Microsoft Edge and Bing might be exempted from DMA regulation. Sources told the reporter that neither service meets the threshold to warrant regulation by the EC.
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