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EU lawmakers pass landmark rules to rein in Big Tech, critics worrying over enforcement
By Arghyadeep Dutta - Jul 05, 2022, 04:11 PM ET
Last Updated - Mar 11, 2024, 01:42 PM EDT
Companies may face fines of up to 10% of annual global turnover for DMA violations and 6% for DSA breaches
• Companies may face fines of up to 10% of annual global turnover for DMA violations and 6% for DSA breaches
• EU parliament voted 588 in favor of the DMA, while 539 MEPs backed the DSA
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The European Parliament on Tuesday gave a final stamp of approval to two major landmark rules to rein in the power of US Big Tech, however, enforcing them could be an issue due to limited resources.
The Digital Markets Act (DMA) will introduce new competition rules for gatekeeping for the tech giants to ensure fair and anti-monopolistic markets, while the Digital Services Act (DSA), which applies to both large and small companies — will set governance rules around the handling of illegal content and products, as well as dialing up broader accountability.
Tech giants such as Google-parent Alphabet Inc (NASDAQ: GOOGL), Amazon.com Inc (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Facebook-parent Meta Platforms Inc (NASDAQ: META) and Microsoft Corp (NASDAQ: MSFT), may face fines of up to 10% of annual global turnover for DMA violations and 6% for DSA breaches.
The regulations were proposed by the European Commission in 2020, and lawmakers and EU states had reached a political deal on both sets of rules earlier this year.
The Commission has welcomed the parliament’s formal adoption of the files — with the internal market commissioner, Thierry Breton, dubbing the “landslide” vote “historic“.
The parliament voted 588 in favor of the DMA, while 539 MEPs backed the DSA.
Need for bigger task force
The two rule books are built on EU antitrust chief Margrethe Vestager’s experiences with investigations into the companies.
DMA will force companies to allow users to remove pre-installed software or apps and enable business owners to promote competing products and services on a platform and reach deals with customers off the platforms; the two rules that will hit Google and Apple hard.
Vestager has set up a DMA taskforce, with about 80 officials expected to join, which critics say is inadequate.
EU lawmaker Andreas Schwab has called for a bigger task force to counter Big Tech’s deep pockets.
“We raised the alarm last week with other civil society groups that if the Commission does not hire the experts it needs to monitor Big Tech’s practices in the market, the legislation could be hamstrung by ineffective enforcement,” European Consumer Organisation (BEUC) Deputy Director-General Ursula Pachl said in a statement.
Picture Credit: CNBC
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