Big Tech is bracing for the European Union’s biggest ever clampdown on anti-competitive practices in the digital economy, potentially provoking a new wave of legal battles between regulators and Silicon Valley.
By Sept. 6, antitrust regulators will announce a list of services likely to include Alphabet Inc.’s Google Search, Apple Inc.’s App Store, Amazon.com Inc.’s marketplace and Meta Platforms Inc.’s Facebook, to be targeted by rules aimed at preventing the most powerful firms from wrecking new markets before it’s too late to act.
The Digital Markets Act, or DMA, which takes effect early next year, will impose a rigid regime of dos and don’ts on firms that previously left regulators in their wake, despite multiple probes into practices that have resulted in billions of euros in fines and tax orders.
It will be illegal for certain platforms to favor their own services over those of rivals. They’ll be barred from combining personal data across their different services, prohibited from using data they collect from third-party merchants to compete against them, and will have to allow users to download apps from rival platforms.
But the groundwork has been laid for some firms to lock horns with the EU in the same courts that have heard challenges to years of ex-post — or after the fact — antitrust enforcement.
“There is likely to be litigation coming,” said Alexandre de Streel, academic director of the digital research program at the Centre on Regulation in Europe, a think tank. “Defining the services to be covered hasn’t been as easy as had been expected.”
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In a meeting between Apple and members of EU competition chief Margrethe Vestager’s cabinet on June 27, the company warned of compliance challenges with the rules, according to a copy of meeting’s minutes obtained via a freedom of information request. The firm noted concerns over the scope of its services to be covered and how users’ experience could be safeguarded.
In a separate email chain, Apple’s lawyers call for more “substantive discussions” regarding their DMA compliance from September onwards.
Notes of a meeting between Amazon Chief Executive Officer Andy Jassy and Vestager on June 21 disclose that the company expressed concern with “overlapping and conflicting regulation coming from national competition authorities.” The company has already challenged its designation under Germany’s own digital competition rules.
Meta chief Mark Zuckerberg also held talks with Vestager to discuss the company’s compliance, which took place in mid-June.
As for other so-called gatekeepers, Microsoft Corp. has been arguing that its Bing search engine is too small a competitor to Google to face the rules. Google itself could have questions on how its search services contend with the new rules, based on comments from the company’s top European lawyer to regulators in December.
None of the Big Tech firms had an immediate comment for Bloomberg when asked about how they intend to comply with the law. The European Commission declined to comment.
Following the commission’s announcement this week, those listed platforms then have six months to re-engineer their services to fall in lines with the rules, or to make legal challenges against the designation decisions.
But while platforms may want to test the limit of the law in court, they may not have so much success, according to Christophe Carugati, affiliate fellow at the Bruegel think tank on digital and competition issues.
“Where these platform reach the necessary thresholds to come under the scope, I don’t think they’ll have a legitimate argument,” he said.