The European Parliament approved on Tuesday two new laws that are set to transform Europe’s digital landscape, making it fairer for companies and …
The European Parliament approved on Tuesday two new laws that are set to transform Europe’s digital landscape, making it fairer for companies and safer for consumers.
With an overwhelming majority, MEPs voted in favour of the Digital Services Act (DSA) and the Digital Markets Act (DMA), after the legislation went through faster-than-usual negotiations between the Parliament and member states.
Considered a world-first, the bills are intended to address the profound changes that have altered the EU’s digital economy in recent years, including the spread of disinformation, electoral interference and the extreme concentration of power in the hands of a few multinationals.
“For too long tech giants have benefited from an absence of rules,” said Christel Schaldemose, the socialist MEP who acted as rapporteur for the DSA.
“The digital world has developed into a Wild West, with the biggest and strongest setting the rules.”
The first law, the Digital Services Act, imposes a set of obligations and rules of accountability on online platforms, such as Google, Facebook and Amazon, to tackle societal risks arising from the Internet.
They will be asked to counter illegal content and products online, curb gender-based violence and hateful speech, and provide more information about their content moderation practices and the way they use algorithms.
Certain types of targeted advertising, like those based on sensitive data, such as race, sexual orientation and religious beliefs, will be banned.
The second law, the Digital Market Act, is a new tool the EU has to enforce fair competition across the single market, together with three traditional instruments: merger approvals, antitrust investigations and state aid control.
The DMA targets so-called “gatekeepers”, platforms that hold such a dominant position in their respective markets that are almost impossible to avoid for consumers.
It is also designed to re-balance business powers: small- and medium-sized companies have often complained they are unable to compete against tech giants and are inevitably pushed out of the markets.
The DMA establishes a list of “dos” and “don’ts” for the companies classified as gatekeepers, those with a market capitalisation of at least €75 billion or an annual turnover of €7.5 billion.
Likely contenders include Airbnb, Alphabet (Google), Amazon, Apple, Booking Holdings, Meta (Facebook), Microsoft, Oracle, PayPal, Salesforce, SAP, Uber, Verizon (Yahoo) and Zoom. A definite list is expected to be published next summer.
Among other obligations, gatekeepers will have to make their services inter-operable with smaller competitors. This will force providers like Whatsapp and Facebook Messenger to enable users to exchange messages across apps.
Additionally, gatekeepers will no longer be allowed to rank their own services more favourably compared to others or prevent users from uninstalling a pre-loaded app, like Gmail on Android phones or Apple Music on iPhones.
The DMA empowers the European Commission to impose hefty fines on those who run afoul of the rules: penalties can reach up to 10% of a company’s total worldwide turnover in the preceding financial year, and 20% in case of repeated infringements.
“Users buy a new phone or a new computer, they will have the choice of what browser they want to use. They will be offered the choice of what virtual assistant they should be using and they can have a broader choice. They can also take smaller search engines as the main search engine,” Andreas Schwab, the German MEP who served as rapporteur for the DMA, told Euronews.
“They will have a choice and that will make markets more contestable and therefore better and more innovative.”
The DSA and the DMA will enter into force 20 days after being published in the EU’s official journal.