Europe’s new Digital Markets Act (DMA) finally started hitting Big Tech with tough antitrust obligations today. And what better way to understand its impact than to look at how tech firms have moved to comply—and to take advantage of new opportunities?
But first, here’s what happens if these so-called gatekeepers—which so far include Apple, Alphabet, Meta, Amazon, Microsoft, and TikTok parent ByteDance—don’t comply. They can get hit with fines of up to 10% of global annual revenue. If they keep breaking the rules, those fines can rise to 20%, and the European Commission can even break businesses up or block them from buying other companies relating to whatever naughtiness is concerned.
It’s worth noting that, in light of how weak enforcement by underfunded national regulators undermined the bite of the EU’s 2018 General Data Protection Regulation, which deals with privacy, the Commission has decided to enforce the DMA itself. The same goes for its sister law, the Digital Services Act, which mostly deals with content-moderation issues. It remains to be seen whether the Commission has the resources to do this effectively for either law, but that’s the plan.
Got that? Cool. Let’s proceed with the changes themselves—and remember, these are Europe-only.
Moving easily to rival services. Many companies have been letting users download their data for years now, but now they’re going beyond that. For example, Google and TikTok owner ByteDance have launched data portability APIs so users can give other developers permission to directly import their data from the gatekeepers’ services—handy for switching service providers, but also potentially for backing up their data.
Freedom from default choices. Remember when Microsoft was once forced to tell Windows users that they had browser options beyond Internet Explorer, like Google’s Chrome? Now Chrome will tell its users that they have other search engine options. And Google will also give Android users a choice of browsers and search engines when they set up their device.
More control over data privacy. Continuing the inexorable bleeding together of data-protection and competition law, people now get to decide if one of these Big Tech conglomerates can keep linking together the data from accounts users have with its various services—something that has big implications for user profiling and ad targeting. So Meta now lets people decouple Facebook and Instagram accounts, and Google does the same for YouTube, Search, and its many other services.
Choice of in-app payment services. Google and Apple now let app developers deploy third-party payment mechanisms that aren’t Google Pay and Apple Pay. Google mostly did this in 2022 already, though it’s only now fully expanded the program to game developers. Apple left everything until the last minute. But hey, third-party developers can actually access the iPhone’s NFC tap-to-pay chip now!
Interoperability of services. Gatekeepers don’t have to make their services interoperable with just anyone—nobody wants security to go out the window—but they do need to allow it in principle. So, for example, users of Meta’s WhatsApp will soon be able to talk to people on other messaging platforms. (Meta is trying to avoid the same obligation for its Messenger service.)
Business data transparency. Business customers of these platforms can now demand easier access to the data they generate. This looks set to have a real impact in the advertising space, as both Google and Amazon are now promising to give advertisers and publishers more data.
No more anti-steering. Well hello there, Apple. Days after the company was fined $2 billion for refusing to let Spotify and other streaming services inform their iOS users about cheaper off-platform subscription deals, the new rules demand more clearly that gatekeepers let business users “promote offers and conclude contracts with customers outside the gatekeeper’s platform.” So that’s definitely now a thing, although Google is trying the interesting tactic of claiming fat fees for these “external offers,” as it calls them. I imagine developers will complain to the Commission about that. But speaking of Apple …
Third-party app stores. Google already allowed third-party app stores on Android, and as of now, Apple must do the same on iOS. The first third party, whose German developers have promised a launch as soon as the DMA comes into force (it isn’t live yet), is Mobivention, which focuses on the enterprise market. MacPaw’s Setapp should follow in April.
However, Apple celebrated the advent of the DMA by denying archnemesis Epic Games’ attempt to launch a European iOS app store and bring Fortnite back to European iPhones. I don’t have space to explain why here—but you can find my comprehensive explainer here. Tl;dr: Apple’s DMA-compliance hissy fit over the past couple months has somehow become even more outrageous, and it’s unlikely to pay off for the company. EU antitrust chief Margrethe Vestager just released a video celebrating the advent of the DMA, and it pointedly referred to Fortnite returning to iOS. I checked with her staff, and she definitely recorded it after Apple’s latest tantrum.
More news below.
David Meyer
Want to send thoughts or suggestions to Data Sheet? Drop a line here.
NEWSWORTHY
Pornhub sues EU. The adult video sites Pornhub and Xvideos have sued the European Commission for hitting them with tough obligations under the new Digital Services Act content-moderation law. As Politico reports, the companies are specifically worried about having to publicly reveal a library of the ads running on their platforms. A third service, Stripchat, was also designated similarly and is also suing the Commission, but the specifics of its case are less clear.
Spotify’s French fees. Spotify is increasing its subscription prices in France because of a new tax there, TechCrunch reports. As of the start of this year, Spotify and its rivals (including France’s very own Deezer) had to start paying a 1.2% levy to a fund supporting the French music sector. It’s unclear what Spotify’s new French pricing will look like, but it will be higher than anywhere else in Europe. Spotify: “With the creation of this new tax, Spotify would be required to give approximately two-thirds of every euro it generates to music to rights holders and the French government.”
South Korea probes AliExpress and Temu. Big Chinese e-commerce platforms including AliExpress and Temu have fallen under the steely gaze of South Korea’s data-protection watchdog. Per Reuters, the regulator wants to check whether the platforms are violating South Korean law around data processing, overseas data transfers, and cybersecurity.
ON OUR FEED
“We seem to be hearing all the time that AI can save the planet, but we shouldn’t be believing this hype.”
—Friends of the Earth’s Michael Khoo, commenting on the release of a new report by environmental groups that stresses how AI will boost energy use and help spread climate disinformation.
IN CASE YOU MISSED IT
‘A serious violation’: Why Apple just killed off Epic’s EU app store, and why the Fortnite maker will probably prevail, by David Meyer
Elon Musk’s German Tesla plant suffers close to $1 billion in damages after attack by the ‘dumbest ecoterrorists on earth,’ by Christiaan Hetzner
Microsoft whistleblower sounds alarm on offensive, harmful energy generated with help of OpenAI tool, by the Associated Press
Former Google engineer charged with stealing AI trade secrets for Chinese firms, by the Associated Press
Nvidia board members cash in stock in the $2 trillion AI company following blockbuster 27% run-up in price, by Amanda Gerut
Inside Mastercard’s multibillion-dollar AI arms race against fraudsters, by John Kell
A drop in deliveries triggers another round of price wars in the Chinese EV market—and that’s bad news for Tesla, by Lionel Lim
BEFORE YOU GO
X payments hope. Elon Musk said yesterday that he thinks his X social media platform, which he wants to turn into an “everything app,” could win a California payments license next month, and similar approval in New York soon after. As Reuters notes: “Experts say X will need a money transmitter license in each state, and Musk has previously said that approval in New York and California would be the most consequential.” Of course, Musk’s timeline claims always need to be viewed with a jaundiced eye.
This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.
