March 7 marks the day when six major tech companies (Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft) must submit compliance reports for the European Union's Digital Markets Act, which has been in force since May 2023. This is how these companies The companies called “gatekeepers” have complied so far and to whom else the DMA can be applied.
The big change goes into effect on March 7: App developers can expect to see new fees in the Google Play Store if they want to direct users to sites or apps outside of the Google ecosystem.
The purpose of the DMA is to ensure that digital markets are “fair and open,” promoting competition and innovation and preventing companies from encouraging users to explore only within that company's ecosystem of applications and products.
Which companies are guardians of the DMA?
In September 2023, the European Commission classified Alphabet (Google's parent company), Amazon, Apple, ByteDance, Meta and Microsoft as “gatekeepers” or providers of certain “core platform services” such as Google Maps, Apple AppStore and Amazon Marketplace . There are 22 main platform services. Booking, ByteDance and X notified the European Commission on March 1 that they are potential candidates for gatekeeper status.
ByteDance is mentioned twice because, in November 2023, the company appealed its gatekeeper status. The company argued that its main product, TikTok, is not established enough to count. Starting in March 2024, it will once again be a “potential” guardian.
SEE: EU regulations could have impacts around the world, including Australia. (Technological Republic)
Guardians must submit DMA compliance reports by March 7
By March 7, designated watchdog organizations must submit compliance reports to the EU, outlining how they plan to follow the Law. Each organization will then work with the Commission individually to refine those plans.
If organizations do not submit their applications by the deadline or make changes to comply with the DMA, they may face fines. The Commission could fine non-compliant organizations up to 10% of the organisation's total worldwide turnover. Recidivism could increase that figure to 20%. In the most serious cases, the Commission could force a gatekeeper to sell all or part of his business, or prohibit him from purchasing certain services.
Who does the DMA apply to?
The DMA applies to organizations that have a significant economic impact in the EU (at least €7.5 billion of EU revenue per year over the last three fiscal years) and have more than 45 million monthly active end users in the EU. , or more. of 10,000 active business users per year for at least three fiscal years.
Apple's responses and the $1.95 billion fine
In January 2024, Apple announced changes to the App Store in response to the DMA that included fees for app developers and a core technology fee of €0.50 per first install for apps with more than one million installs each year. . Epic Games CEO Tim Sweeney called this “malicious enforcement” in January.
Other services that use the App Store were also not satisfied with Apple's response. On March 1, a group of companies, including Spotify, addressed the European Commission and said that Apple's attempt to comply with DMA “appears designed to maintain and even amplify Apple's exploitation of its dominance over developers.” Of applications”.
The DMA fined Apple $1.95 billion on March 4 specifically because of the protest launched by Spotify over how Apple promotes its own music service, the AP reported. Apple plans to appeal the fine.
Google Actions for DMA Compliance
Some important changes to Google products and services were announced on March 5. These changes include:
- Removal of some Google Search widgets, such as Google Flights, to allow greater access to individual businesses.
- New settings to choose how data is shared between different Google services.
- “Choice screens” for Android and Chrome to encourage the user to choose their preferred search engine or browser.
Android already allows third-party app stores and side loading, something the DMA has forced Apple to do with its AppStore.
On March 6, Google launched a feature that allows developers of apps distributed through the Google Play Store to guide users in the European Economic Area outside of the app, including for advertising promotions, visiting other app stores, or visiting the developer website.
Developers who sign up for Google's external offering program will pay two fees for the first two years:
- An initial acquisition fee of 5% for auto-renewing subscriptions and 10% for other offers.
- An ongoing services fee of 7% for auto-renewing subscriptions and 17% for other offers.
Steps to comply with DMA from Meta, Amazon, ByteDance
The impact of DMA on the industry and customers
It is still too early to say what the most significant impact of the DMA will be on the industry and customers.
“For the DMA to be successful, the assessment of enforcement and compliance must be proportionate and impartial, taking into account the significant differences between gatekeepers, as well as how these services work in reality,” wrote Daniel Friedlaender, senior vice president and director of Europe's Computer. and Communications Industry Association, in a statement.
“There are simply no one-size-fits-all solutions for DMA compliance,” Friedlaender said. “The Commission must allow technology companies to continue to differentiate themselves from others. Otherwise, online services could be forced to become more alike or abandon features that differentiate them from their competitors.”
