DIGITAL MARKETING ACT

A Landmark Piece Of Legislation

     The European Union & Council reached provisional agreement on the new ‘Digital Markets Act’ (DMA), a landmark piece of legislation which, among various elements, will seek to impose restrictions on how user data can be shared, while it also aims to dilute the dominance of the big tech players by enforcing more open access. The DMA also aims to make the digital sector fairer and more competitive. Final technical work will make it possible to finalise the text in the coming days.

    The Digital Markets Act introduces do's and don’ts for “core platform services,” including social networks and search engines, defined as “gatekeepers” — companies with a market value of more than 75 billion euros or an annual turnover of 7.5 billion. Under the legislation, personal data for targeted advertising will only be allowed with a gatekeepers’ explicit consent and gatekeepers will be required to give users choice over their browser, virtual assistants or search engines. The regulation also requires that large messaging services including WhatsApp and Facebook Messenger will have to “open up and interoperate with smaller messaging platforms, if they so request.

     A key part of the proposal aims to also eliminate what the EU is calling ‘killer acquisitions’: “The Commission might prohibit gatekeepers from engaging on acquisitions in the areas relevant to this regulation, such as digital or to the use of data related sectors e.g. gaming, research institutes, consumer goods, fitness devices, health tracking financial services, and for a limited period of time where this is necessary and proportionate to undue the damage caused by repeated infringements or to prevent further damage to the contestability and fairness of the internal market.”

    Several international digital specialists have praised the EU’s Digital Market Act, but say its primary aim is to foster competition among tech companies while trying to reign in some of the tech giants. They say its primary focus is not protecting the personal information of digital users. European Union ‘Digital Market Act’ is good, but for online users-It’s not good enough. As with GDPR, there will be messiness. Implementation of some of the EU’s new rules — especially around messaging app interoperability — could be treacherous. But this is what happens when an industry fails to self-regulate. The government can step in and do it for them. We’re starting to see some moves that could’ve warded off the EU’s intervention — such as Google’s reform with Android — but it’s looking like it’s too little too late. The tech critics had some valid points. And after seeming ineffective for some time, it’s clear they’re going to land some punches.

      The new rules come at a time when big tech is under immense scrutiny and, as before, the EU is taking the first set of steps to “rectify” what it thinks are core problems plaguing the industry. The EU already has one of the most comprehensive user data protection laws under the General Data Protection Regulation (GDPR). The issue of in-app payments, third party app stores, fairness in ranking, and pre-loaded apps have been raised across the world. In the US, Epic has sued Apple over in-app payments and won, although Apple has managed to get an injunction on implementing the changes. In South Korea, a law was passed, which specifically banned Apple and Google from forcing developers to use their own in-app payments system. The US is deliberating on these questions. In India too, app developers have raised the issue of control, in-app payments, and third-party app stores. Once the EU’s new rules come into effect, they could set an important legal precedent for other countries to follow.