DMA will constitute a ‘paradigm shift in digital markets,’ say rivals.
The world’s leading tech, ecommerce, and social media companies have until March 7, 2024, to comply with the European Commission’s Digital Markets Act which requires them to demonstrate their commitment and plans to end any anticompetitive behaviors. Branded by the EC as digital platform market “gatekeepers,” Google, Amazon, Apple, Meta, Microsoft, and TikTok owner ByteDance, they operate 20 “core platform services” as defined by the Commission, i.e., search engines, online intermediation services, social networks, video sharing platforms, communication platforms, advertising services, operating systems, and cloud services.
Smaller competitors – whose brands are not household names in the U.S. but figure prominently in Europe – banded together to prod the gatekeepers toward compliance, expressing in an open letter fear of a “lack of effective engagement” by the corporate giants and urging them into a dialogue to get in line with the spirit of the law. The letter was dated Jan. 16 and was posted on the LinkedIn page of Paris-based Adevinta CEO Antoine Jouteau, among other places.
“The DMA will affect how millions of consumers and business users interact with social networks, app stores, online shopping, video sharing services, mobile phones, personal messaging services, online search engines, etc.,” the letter reads. “It will constitute a paradigm shift in digital markets with one fundamental objective: the creation of fair and contestable digital markets in Europe. It should put an end to anticompetitive practices that led to higher prices for consumers and slowed innovation in Europe.”
The EC and the European Parliament have asked the gatekeepers to submit draft compliance solutions ahead of the deadline to allow time to consult with business users and consumers, the letter says. As of Jan. 16, the smaller competitors felt engagement by the gatekeepers was underwhelming.
The signers are: Adevinta, Allegro, Billiger.de, Ceneo, CompareGroup, Ecosia, Element, Favi, Heureka Group, Idealo, Kelkoo, Ladenzeile, Le Guide.com, OLX, Open-Xchange, Panther Holding GmbH, Preis.de, Prisjakt, Proton, Qwant, Runnea, Schibsted, Solute, and Vipps.
Google worried about ‘difficult trade-offs.’
On Jan. 17, the day after the open letter was posted, Google issued a statement saying it has been working hard in advance of the DMA deadline, testing and rolling out product changes, seeking feedback on changes from the EC and “stakeholders like developers, advertisers and companies who will be affected by them.” Google says that while it supports “many of the DMA’s ambitions around consumer choice and interoperability,” it warns of “difficult trade-offs” that could reduce choices for services in Europe.
Google says it will seek additional consents from consumers for linked services, intended to give users more control over data that is shared across Google products and what content and ads are surfaced. It plans to include new information, like photos, pricing, and links to price-comparison services, in results for accommodations and products. Today, Android users can switch default search engines or browsers. Under the DMA, Google and others will need to show additional choice screens. Also, Google says it will meet new data portability requirements.
A few days later, Meta issued its update on efforts to comply with the DMA, saying “people using Instagram and Facebook in the EU, EEA and Switzerland will be offered more choices about how they can use our services and features.” Meta says it is “investing significant resources to offer users these choices and to ensure our ongoing compliance.” For information used between Facebook and Instagram, consumers who have already chosen to connect accounts will be able to continue to do so through the Accounts Center, or manage their accounts separately so that their information is no longer used across accounts. Meta also signaled changes relating to Facebook Messenger, Marketplace, Gaming, and Ads.
While there is no evidence that Google and Facebook were moved to issue their statements, the timing just hours and days after the smaller competitors voiced concerns suggest their letter at least grabbed some attention.
As for Microsoft, according to reports, including one by Kevin Okemwa for WindowsCentral.com, Microsoft Edge and Bing might be exempted from DMA regulation. Sources told the reporter that neither service meets the threshold to warrant regulation by the EC.