John Koetsier Gatekeepers Compliance The 22 core services that the EU has indicated must comply with the Digital Markets Act are Failure to comply has steep penalties Reactions
John Koetsier
Gatekeepers
The European Union released its first list of “gatekeeper” companies today. Five of them are American, one is Chinese, and zero of them are European. All have six months to “ensure full compliance” with the EU’s new Digital Markets Act, which will have significant consequences for 22 different services that those companies provide, including web search, social networking, messaging, operating systems, maps, and marketplaces.
Alphabet (Google)
Amazon
Apple
ByteDance (TikTok)
Meta (Facebook)
Microsoft
Compliance
The EU requires that all of these companies achieve compliance with the DMA within six months, which means they must allow third parties to interoperate with their services, share data with companies using their platforms, treat all services and products offered by third parties on their platforms equally alongside their own services, and much more.
The platforms these companies own will not be able to prevent consumers using them from linking to businesses outside their platforms, must allow preinstalled software to be uninstalled, and can not track users activities outside of their services without “effective consent.”
The 22 core services that the EU has indicated must comply with the Digital Markets Act are
TikTok
Facebook
Instagram
LinkedIn
WhatsApp
Facebook Messenger
Google Maps
Google Play
Google Shopping
Amazon Marketplace
Apple’s App Store
Meta Marketplace
YouTube
Google Search
Chrome (browser)
Safari (browser)
Google Ads
Amazon Ads
Meta Ads
Android
iOS
Windows
In short, the DMA is a powerful and far-reaching piece of legislation that will severely constrict how the mostly American technology companies will be able to operate in Europe.
Failure to comply has steep penalties
up to 10% of the company’s total worldwide annual turnover
up to 20% in the event of repeated infringements
up to 5% of the average daily turnover (in the case of periodic penalty payments)
in case of repeated offenses, “non-financial remedies can be imposed,” the EU says, including “These can include behavioural and structural remedies, e.g. the divestiture of (parts of) a business”
Reactions
Some called it anti-American, including Patrick Hedger, the Executive Director of the Washington, DC-based Taxpayers Protection Alliance, who called it a “shakedown” and pointed out that calling the launch day for the DMA “D-Day” could be particularly inappropriate.
Others called it a sad commentary on Europe’s home-grown tech ecosystem, saying that “no company even comes close to meeting the threshold of gatekeeper status.”
“And with regulations like this, no incentive for any EU company to aspire to be a real competitor to these six,” says Martijn Rasser, a manager director at Datenna. “Self-defeating move by Brussels.”
I wonder, what's stopping any of these companies from putting up a TOS that allows them to do whatever they were doing so far, in regards to user tracking & data sharing, while declining said TOS...
I wonder, what's stopping any of these companies from putting up a TOS that allows them to do whatever they were doing so far, in regards to user tracking & data sharing, while declining said TOS would not allow you to use their service?
Two things: First, company-provided TOS cannot overwrite laws. This is why a large portion of stuff in software's TOS and EULAs, even if I accept them, could not apply to me were I to violate it....
Exemplary
Two things:
First, company-provided TOS cannot overwrite laws. This is why a large portion of stuff in software's TOS and EULAs, even if I accept them, could not apply to me were I to violate it. If I wanted to push the issue legally, I could declare them invalid. Companies still do it of course knowing full-well that not only do people not care and just comply, but they also would never take a lawyer and get the issue into a court, plus they could just bankrupt anybody by dragging it out.
Second and far more relevant, this compliance is required to be allowed to operate on the EU market. Otherwise you lose your business license I would imagine, or at least incur heavy fines on it.
I think the key here is these companies must comply if they want to operate in the European Market. When the GDPR laws came into effect and everyone added those cookie banners asking if they can...
I think the key here is these companies must comply if they want to operate in the European Market.
When the GDPR laws came into effect and everyone added those cookie banners asking if they can track you, some smaller websites (I only remember a recipe sharing website) straight up didn't work in the EU and gave you a message saying because of the new mandates they stopped operating here. Leaving is always an option but you lose a big demographic of wealthy countries you can monetize.
If some of these giant tech companies did in fact choose to leave then that creates a n opportunity for an EU equivalent replacement to step in and fill the gap in the market which I would be more than happy to see.
EU Commission law-keepers/prosecutors and the above mentioned fines, I assume. I could see this being mentioned (and prohibited) in some regulation already, or perhaps this one covers it....
I wonder, what's stopping any of these companies from putting up a TOS that allows them to do whatever they were doing so far, in regards to user tracking & data sharing, while declining said TOS would not allow you to use their service?
EU Commission law-keepers/prosecutors and the above mentioned fines, I assume. I could see this being mentioned (and prohibited) in some regulation already, or perhaps this one covers it.
Alternatively, they can risk losing the second most attractive consumer market with regards to technology, as the EU has shown with this they are ready to fight, or at least try to regulate Big Tech, so I wouldn't put it past them to outright ban certain firms/offerings. And I'm assuming 10% of turnover (!!) is something that most of these firms probably won't want to risk happening [more than maybe once after learning the lesson].
Another win for the EU in my book. And unlike some of the mentioned opinions in the article, I don't see it as preventing growth* because your firm is at some point doomed to fall into "gatekeeper" status with all its stricter regulation/downsides:
Undertakings will continue to form and grow as long as we live in a democratic, capitalistic free market, and either they will try to bubble just below or outside of "gatekeeper" status, or don't, and as an added bonus in the latter case, probably aspire being compliant with these rules from the get-go in case of ever becoming affected themselves.
*You could argue it is somewhat Anti-American, but again, to me it feels more that way because of just "historical growth". Odds aren't low that this regulation would've been decided favorably on even if it had been 4 EU companies, one from the US, and a Chinese one.
I think "unamerican" in this case is code for "anti-monopoly" which it certainly is, and should be IMO. Americans started losing s soo as the precedent was set that it was okay to have a monopoly...
I think "unamerican" in this case is code for "anti-monopoly" which it certainly is, and should be IMO. Americans started losing s soo as the precedent was set that it was okay to have a monopoly as long as "it didn't affect consumer prices"
I think the DMA makes sense, but the technical requirements are really challenging due to the data access limitations. One that doesn't get much discussion is that these gatekeeper companies...
I think the DMA makes sense, but the technical requirements are really challenging due to the data access limitations. One that doesn't get much discussion is that these gatekeeper companies aren't allowed to share any data outside of the department that the data originated in without user/business consent. It's absolutely possible to implement this, but it's a massive shift in how these companies do business.
As an example, if Apple's marketing department wants to create some targeted campaign based on which movies get played the most on Apple TV, it's now a serious violation for marketing to view internal streaming records from companies with movies on Apple TV. Only the originating departments can access their own data, and it's only supposed to be for determining technical requirements etc.
That makes sense to me, analytics should be used to determine the effectiveness and performance of your product and its functions not as marketing to determine how best to sell you more crap you...
That makes sense to me, analytics should be used to determine the effectiveness and performance of your product and its functions not as marketing to determine how best to sell you more crap you dont need, or to more easily determine what abuse a demographic of consumers can take.
Cool, more control over your own data seems good to me. Im not seeing any obvious downsides.
If that's your view on what marketing is then you're not gonna like this. Because it makes more such data available to more entities to be able to do exactly that. And it requires the gatekeepers...
That makes sense to me, analytics should be used to determine the effectiveness and performance of your product and its functions not as marketing to determine how best to sell you more crap you dont need, or to more easily determine what abuse a demographic of consumers can take.
If that's your view on what marketing is then you're not gonna like this. Because it makes more such data available to more entities to be able to do exactly that. And it requires the gatekeepers to open up access to every channel they have available for sending marketing to everyone else, meaning more advertising being sent your way.
I havent seen that in what ive read so far(not much) so ill take a look but at the same time gdpr already protects against this with consent requirements to tie app activity to actual user...
I havent seen that in what ive read so far(not much) so ill take a look but at the same time gdpr already protects against this with consent requirements to tie app activity to actual user details. My understanding of all this is limited though
Well it also has a Chinese company, so I guess that's more salt in the wound. One problem that the EU has is its aversion to state aid. This means that they've been played by Asian countries on...
Well it also has a Chinese company, so I guess that's more salt in the wound. One problem that the EU has is its aversion to state aid. This means that they've been played by Asian countries on the industrial policy front (see TSMC and the EU's attempts to catch up by spending small amounts of money on the problem to compete with a company that enjoys essentially the full backing of the Taiwanese state), but also by Americans on the tech front. There's a talk by Mazzucato about the importance of government in fostering innovation. For example, the US has DARPA which has come up with an incredible string of innovations over the last 65 years. But it's not just about funding research in academia (where it's going to get a bit hairy for the EU as the godo universities in Europe are really only in the UK and Switzerland so they're in trouble). Apple's original seed funding came from the US government!
It will be interesting to see if they can change this (especially now post Ukraine war).
John Koetsier
Gatekeepers
Compliance
The 22 core services that the EU has indicated must comply with the Digital Markets Act are
Failure to comply has steep penalties
Reactions
I wonder, what's stopping any of these companies from putting up a TOS that allows them to do whatever they were doing so far, in regards to user tracking & data sharing, while declining said TOS would not allow you to use their service?
Two things:
Nuance: in the US (and maybe Canada) that is. Most European countries have legalities in place to prevent such a thing.
I think the key here is these companies must comply if they want to operate in the European Market.
When the GDPR laws came into effect and everyone added those cookie banners asking if they can track you, some smaller websites (I only remember a recipe sharing website) straight up didn't work in the EU and gave you a message saying because of the new mandates they stopped operating here. Leaving is always an option but you lose a big demographic of wealthy countries you can monetize.
If some of these giant tech companies did in fact choose to leave then that creates a n opportunity for an EU equivalent replacement to step in and fill the gap in the market which I would be more than happy to see.
EU Commission law-keepers/prosecutors and the above mentioned fines, I assume. I could see this being mentioned (and prohibited) in some regulation already, or perhaps this one covers it.
Alternatively, they can risk losing the second most attractive consumer market with regards to technology, as the EU has shown with this they are ready to fight, or at least try to regulate Big Tech, so I wouldn't put it past them to outright ban certain firms/offerings. And I'm assuming 10% of turnover (!!) is something that most of these firms probably won't want to risk happening [more than maybe once after learning the lesson].
Another win for the EU in my book. And unlike some of the mentioned opinions in the article, I don't see it as preventing growth* because your firm is at some point doomed to fall into "gatekeeper" status with all its stricter regulation/downsides:
Undertakings will continue to form and grow as long as we live in a democratic, capitalistic free market, and either they will try to bubble just below or outside of "gatekeeper" status, or don't, and as an added bonus in the latter case, probably aspire being compliant with these rules from the get-go in case of ever becoming affected themselves.
*You could argue it is somewhat Anti-American, but again, to me it feels more that way because of just "historical growth". Odds aren't low that this regulation would've been decided favorably on even if it had been 4 EU companies, one from the US, and a Chinese one.
Edit: historic to historical
I think "unamerican" in this case is code for "anti-monopoly" which it certainly is, and should be IMO. Americans started losing s soo as the precedent was set that it was okay to have a monopoly as long as "it didn't affect consumer prices"
I think the DMA makes sense, but the technical requirements are really challenging due to the data access limitations. One that doesn't get much discussion is that these gatekeeper companies aren't allowed to share any data outside of the department that the data originated in without user/business consent. It's absolutely possible to implement this, but it's a massive shift in how these companies do business.
As an example, if Apple's marketing department wants to create some targeted campaign based on which movies get played the most on Apple TV, it's now a serious violation for marketing to view internal streaming records from companies with movies on Apple TV. Only the originating departments can access their own data, and it's only supposed to be for determining technical requirements etc.
That makes sense to me, analytics should be used to determine the effectiveness and performance of your product and its functions not as marketing to determine how best to sell you more crap you dont need, or to more easily determine what abuse a demographic of consumers can take.
Cool, more control over your own data seems good to me. Im not seeing any obvious downsides.
If that's your view on what marketing is then you're not gonna like this. Because it makes more such data available to more entities to be able to do exactly that. And it requires the gatekeepers to open up access to every channel they have available for sending marketing to everyone else, meaning more advertising being sent your way.
I havent seen that in what ive read so far(not much) so ill take a look but at the same time gdpr already protects against this with consent requirements to tie app activity to actual user details. My understanding of all this is limited though
Well it also has a Chinese company, so I guess that's more salt in the wound. One problem that the EU has is its aversion to state aid. This means that they've been played by Asian countries on the industrial policy front (see TSMC and the EU's attempts to catch up by spending small amounts of money on the problem to compete with a company that enjoys essentially the full backing of the Taiwanese state), but also by Americans on the tech front. There's a talk by Mazzucato about the importance of government in fostering innovation. For example, the US has DARPA which has come up with an incredible string of innovations over the last 65 years. But it's not just about funding research in academia (where it's going to get a bit hairy for the EU as the godo universities in Europe are really only in the UK and Switzerland so they're in trouble). Apple's original seed funding came from the US government!
It will be interesting to see if they can change this (especially now post Ukraine war).
Perhaps. But TSMC is nothing without ASML, a Dutch company.
See also https://tildes.net/~tech/1a95/european_union_digital_markets_act_aims_to_allow_more_competition_and_let_consumers_delete
Goal is to start a company that’s so successful that EU exports a regulation onto it.