Negotiations will begin next year with EU states to impose new restrictions on large digital multinationals.
EU lawmakers have voted overwhelmingly in favour of the Digital Markets Act (DMA), the proposed law that seeks to impose stricter rules around tech competition in Europe.
This act, along with the Digital Services Act (DSA), aims to rein in the monopoly large multinationals hold in Europe’s digital space.
The European Parliament’s internal markets committee voted in favour of the DMA last month and now Parliament has given the draft law the green light.
MEPs showed strong support for the act with 642 votes in favour, eight against and 46 abstaining yesterday (15 December), and negotiations will now begin with member states.
The DMA aims to blacklist certain practices used by large ‘gatekeeper’ platforms – companies that wield a disproportionate amount of power in their markets – and enables the European Commission to carry out market investigations and sanction non-compliant behaviours. The proposal has already led to clashes between EU lawmakers and large tech firms.
German MEP Andreas Schwab said the vote sends a strong signal that the EU is against unfair business practices and will ensure digital markets are open and competitive.
“Our message is clear: the EU will enforce the rules of the social market economy also in the digital sphere, and this means that lawmakers dictate the rules of competition, not digital giants,” Schwab added.
EU antitrust chief Margrethe Vestager – who unveiled the DMA in December 2020 – welcomed the result, describing it as an “early Xmas gift” on Twitter.
“It sends a clear message that in our democracy it is not for Big Tech to set the rules of the game, it is for legislators.”
Early Xmas gift 🥳 Today’s @Europarl_EN vote on #DMA means fair and contestable markets are on their way. It sends a clear message that in our 🇪🇺democracy it is not for #BigTech to set the rules of the game, it is for legislators. HUGE congrats @Andreas_Schwab & all of us! pic.twitter.com/PtkMVQz1pg
— Margrethe Vestager (@vestager) December 15, 2021
The approved text will be the mandate used for negotiations with EU governments, which are planned to start under the French presidency of the council in early 2022.
The DSA – a proposal to regulate online platforms on issues such as illegal content and algorithms – is due to be voted on in January 2022.
Key points of the approved text
The proposed regulation will apply to major companies providing “core platform services” most prone to unfair business practices, including social networks, search engines, operating systems, online advertising services, cloud computing and video-sharing services. MEPs also want web browsers, virtual assistants and connected TV to be within the scope of the DMA.
In the text approved by MEPs, the new thresholds for a company to be designated gatekeeper status would include an annual turnover of €8bn in the European Economic Area, a market capitalisation of €80bn, and to be in at least three EU countries with at least 45m monthly users or 10,000 business users.
The European Commission could restrict or temporarily halt gatekeepers from making “killer acquisitions” that can cause damage and a lack of competition to a market.
The approved text includes additional requirements on the use of data for targeted advertising and giving users the option to uninstall pre-installed software applications, such as apps, on a core platform service at any stage.
It also clarifies the role of national competition authorities while keeping a centralised enforcement in the hands of the Commission. The DMA should ensure whistleblowers are able to alert competent authorities to actual or potential infringements and protect them from retaliation, it adds.
Gatekeepers that do not comply with the proposed regulations could face fines between 4pc and 20pc of their total worldwide turnover in the preceding financial year.
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