Regulatory law now in effect in Europe that affects Google, Apple and other technology companies

(CNN) — Users of Apple, Google and other major technology platforms in Europe woke up to a new reality this Thursday when a landmark law imposed strict new competition rules on companies, giving European Union (EU) citizens access to information about their phones, apps, browsers. And the experience changed. More.

The new EU rules impose sweeping changes on some of the world’s most used technology products, including Apple’s App Store, Google’s search and messaging platform and Meta’s WhatsApp. And they mark a turning point in regulators’ global effort to rein in tech giants after years of allegations that the companies were flouting competition rules to harm consumers.

The broader obligations apply only to the European Union, which could leave technology users in the United States out of some of the measures Big Tech is implementing in response to the European directive.

In a major change to comply with the law, Apple said it plans to allow EU users to download iPhone apps through third-party app stores, marking the beginning of the App Store 15 years ago. For the first time since, his control over iOS will be reduced.

In another significant change, Google said it will make changes to search results to direct more traffic to independent price comparison or travel booking sites rather than directing users to Google Flights or other proprietary tools. Google will allow Android users to select a preferred browser and search engine from a menu of options when setting up their devices for the first time, rather than having users default to Google’s Chrome browser and search engine. This could benefit rival browsers like Opera or Mozilla’s Firefox and competing search engines like DuckDuckGo or Microsoft’s Bing.

Apple Inc. in Berlin, Germany on Friday, Sept. 22, 2023. The new range of iPhone 15 smartphones will be on display at the Rosenthaler Strasse store. (Credit: Krisztian Bocci/Bloomberg/Getty Images)

Meanwhile, under a new openness requirement imposed on the social media giant, users of messaging apps like Signal or Viber will soon be able to send chat messages directly to people using Meta’s Messenger and WhatsApp platforms.

And streaming services like Spotify and Netflix could potentially market discounts within their apps to people who purchase subscriptions through the services’ respective websites, rather than through in-app payment systems imposed on app developers.

order of europe

The industry-wide changes are linked to the Digital Markets Act (DMA), a 2022 law that requires major online platforms to give users more choices and rivals more opportunities to compete. Its sweeping obligations affect six of the world’s largest tech companies: Amazon, Apple, Google, Meta, Microsoft and ByteDance, TikTok’s parent company.

By mid-May, that list could also include X and Elon Musk’s, the European Commission said this week.

Violations of the DMA can result in severe penalties, including fines of up to 10% of a company’s global revenue and up to 20% for repeat violations. For most regulated companies, this will translate into tens of billions of dollars.

For years, political leaders around the world have accused tech giants of monopolizing digital markets and using consumers’ personal data to increase their power or identify new markets for dominance. Tech giants, for their part, have insisted that they compete vigorously, creating valuable opportunities for entrepreneurs and injecting billions of dollars into economic activity.

Europe-wide new rules highlight doubts about that argument and show how the EU is leading the fight over technology regulation globally, sometimes to the detriment of the rest of the world.

The trade bloc has in recent years passed other sweeping laws regulating digital privacy, social media and, soon, artificial intelligence. Some of its rulings have had a wide-ranging impact: In 2022, a new European Union law required Apple to use USB-C as the charging standard for mobile devices, causing Apple to ban all of its Apple products, including the United States. The standard had to be adopted for new iPhones.

target certain managers

Europe’s new competition law does not directly target the six companies mentioned. Rather, it says that companies that meet a specific size threshold must follow certain “gatekeeper” rules to avoid abusing their enormous economic power.

The way the EU plans to regulate that power is to give consumers more control over how tech giants use their personal information. Under the DMA, EU citizens will be able to opt out of sharing their usage history of an app with other apps owned by the same company. For example, Google users will be able to prevent their search and browsing history from being shared with Google’s YouTube video platform, which could affect the videos YouTube suggests to users. Meanwhile, Amazon will require consumers’ consent before using their Prime Video, Kindle or Audible history to make targeted recommendations or advertising on its e-commerce marketplace.

The digital competition law, the first of its kind in Europe, stands in contrast to the United States, where proposals to regulate the technology industry have repeatedly failed. Some of the ideas included in the DMA have been replicated in US law, but have failed to pass amid industry opposition and general congressional gridlock.

While the law may increase demand for tech companies to expand EU-specific features to other markets, some platforms have shown signs of willingness to do so. For example, Apple’s plans for the App Store in Europe differ significantly from the changes it made to its US-based App Store as part of an antitrust lawsuit involving Epic Games, the creator of “Fortnite # Apple has given no indication that it will harmonize the two sets of policies.

Consumer groups say the DMA promises to lower prices for Europeans by forcing platforms to open up and forcing them to compete on a more level playing field.

“We have worked very hard at the EU level to adopt this legislation that reforms digital markets for the benefit of consumers,” said Agustín Reyna, legal director of BEUC, a coalition of consumer advocacy organizations based in the EU.

Google and Apple hit back

But some technology companies have rejected DMA, saying it could have unintended consequences.

For example, Google argued this week that changes it made to search results in response to DMAs could lead to more searches on travel or restaurant listing aggregators rather than individual hotels, airlines, restaurants and retailers. It also warned that due to new requirements around data sharing, many of Google’s recommendation features “will no longer work in the same way”, suggesting that life could become less comfortable for users who revoke their consent.

Meanwhile, Apple has said that due to Apple’s weak control over app developers, the requirements to support third-party app stores may expose iOS users to greater amounts of malware or spam.

“The new options we are introducing to comply with the DMA inevitably mean we will not be able to protect users in the same way,” Apple wrote in a white paper published last week ahead of Thursday’s compliance deadline. ” “The changes required by the DMA will inevitably create a gap between the protection of EU users and the protection enjoyed by Apple users outside the EU,” he said.

There may be some truth in this, but DMA advocates have said that it can be difficult to determine where legitimate objections to the law end and self-interest begins.

As companies begin to comply with the letter of the WFD, expect that some will try to circumvent its spirit by using consumer scare tactics or “dark patterns”, subtle interface designs intended to make users more The temptation is to share data or make other decisions as the company prefers. , Reyna says.

“These include misleading language such as ‘free use’ when consumers pay (for a service) with their data,” BEUC wrote in a report last week. “Data protection options are buried in the maze of settings, and the use of contrast and color for the ‘Accept’ and ‘Decline’ buttons can guide users toward the response the gatekeeper wants.”

Some companies are already accusing the tech giants of breaking the law.

On Wednesday, Epic Games published emails showing that Apple blocked its request to launch a third-party app store on iOS in Europe this month. In a complaint to EU authorities, Epic said that Apple justified the decision by citing Epic’s deliberate violations of Apple’s App Store terms in the past and Epic’s public criticism of Apple.

Epic Games CEO Tim Sweeney said, if Apple’s decision is allowed to stand, it would mean that the tech giant could thwart competition by pointing to a rival’s past efforts to report anti-competitive behavior and Can weaken the law.

Previous US court rulings have upheld Apple’s right to sever ties with Epic for any reason, Apple said in a statement. “In light of Epic’s past and present conduct, Apple decided to exercise that right.”

The European Commission has asked Apple to explain its actions under the DMA, a commission spokesperson told CNN on Thursday. The EU executive body is also assessing whether Apple’s actions “raise doubts about its compliance” with other EU rules, the spokesperson said.

Compliance deadline day in Europe

Thursday’s deadline is the last chance for parent companies to submit their detailed plans to the European Commission showing how they will comply with the DMA.

After reviewing the plans, which could take weeks or months, the Commission may choose to launch investigations into companies suspected of non-compliance. Those investigations could last up to a year. Even after reviewing the plans, the Commission can initiate compliance checks at any time, especially if it receives complaints from the public.

The Computer & Communications Industry Association (CCIA), a trade group representing four of the six surveillance companies (Amazon, Apple, Google and Meta), told CNN that “regulators should resist the temptation to politicize the process. ” Review of plans.

“The application of the DMA must be proportionate and fair, taking into account the significant differences between gatekeepers, as well as how these services work in reality,” said Daniel Friedlaender, CCIA senior vice president and head of its European office.

Friedlaender warned that DMAs could frustrate consumers due to “product upgrades they don’t want” or they could see “changes to their favorite services that they don’t really like.”

Olesya Dmitrakova contributed reporting.

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