EU Institutions Agree on Provisional Rules for Major Internet Platforms

Big internet platforms will be subject to tougher competition rules after EU governments and lawmakers reached political agreement on language in the proposed Digital Markets Act (DMA), they said. The deal, if approved by the full EU Council and European Parliament, targets "gatekeepers," large companies that provide core platform services and have annual revenue of at least 75 billion euros ($83 billion), the Council said Thursday.

To be designated as gatekeepers, such businesses must also provide certain services such as browsers, messengers and social media and have at least 45 million monthly end-users in the EU and 10,000 annual business users. Small and mid-sized companies are exempt from being identified as gatekeepers except in exceptional cases.

The deal includes provisions requiring the largest messaging services, such as WhatsApp or Facebook Messenger, to interoperate with smaller messaging platforms if requested, allowing users to exchange messages, send files or make video calls across apps, the European Parliament noted. Lawmakers also pressed for, and got, provisions ensuring that combining personal data for targeted advertising will be allowed with users' express consent to the gatekeeper, and a requirement that users be allowed to freely choose their browser, virtual assistants or search engines.

Large platforms would be banned from ranking their own products or services higher than those of others, reusing private data collected during a service for the purpose of another service, and pre-installing certain software applications, the Council said. Violations could bring fines of up to 10% of a gatekeeper's annual total global revenue, up to 20% for repeat offenses, or, for systematic noncompliance, an antitrust investigation.

The DMA is a "complex and wide ranging piece of legislation," Amazon emailed: It's "committed to delivering services that meet our customers' requirements within Europe's evolving regulatory landscape."

The measure is another piece of EU legislation that's likely to have reverberations beyond its borders and "seems particularly discriminatory to U.S. companies," said SIIA President Jeff Joseph. Among other things, it will disadvantage large U.S. tech companies compared with their foreign competitors and harm international data security and consumer protection, he said.

EU politicians have designs on regulating U.S. tech companies in a way that benefits European rivals, while U.S. legislators focus on protecting consumers, said Computer & Communications Industry Association President Matt Schruers: “It is one thing for the EU to conduct regulatory experiments to restrain U.S. tech companies but quite another thing for the U.S. to inflict such self-harm. Being home to a thriving tech sector, the U.S. has the most to lose from getting digital competition policy wrong.”

Digital rights activists and consumers, however, applauded the deal. "This is a big moment for consumers and businesses who have suffered from Big Tech's harmful practices," said Ursula Pachl, European Consumer Organisation deputy director-general. The European Commission must now "make sure that the new obligations not to re-use personal data and the prohibition of using sensitive data for surveillance advertising are respected and enforced," said European Digital Rights Senior Policy Adviser Jan Penfrat: Only then will people who depend on digital services see a change.