Strategists within the industry always strive to create opportunities for new entrepreneurs to enter the markets in order to encourage perfect competition. However, the process can sometimes be hindered by some “gatekeepers” who aim to negatively influence the market for the sake of their own benefits. To curb this unwanted access to digital marketing, the European Union (EU) has recently announced plans to carry out a “Digital Market Act (DMA)” effective from spring 2023 directed towards initiating strict ethical regulations against such gatekeepers via legal means who promote unfair business practices within the tech industry. The act is formally passed by the European Council and the Parliament for further rulings.
As per the Parliamentary proceedings on Thursday evening, the “gatekeeper” companies would be subjected to a penalty of about “10% of their total worldwide turnover in the preceding financial year” and up to 20% in the case of non-compliance with the set rules and regulations by the EU. The Parliament’s internal market and consumer protection committee said, “The agreement ushers in a new era of tech regulation worldwide.” The Digital Markets Act puts an end to the ever-increasing dominance of big tech companies. From now on, they must show that they also allow for fair competition on the internet. The new rules will help enforce that basic principle. Europe is thus ensuring more competition, more innovation, and more choice for users. Above all, the law avoids any form of overregulation for small businesses. App developers will get completely new opportunities, small businesses will get more access to business-relevant data, and the online advertising market will become fairer.”
Setting a seal on the deal, Parliament made explicit content mandatory along with the provision of personal advertising data to the gatekeepers in order to retain the privacy of end-users. Moreover, users should be given an independent hand to choose the search engine of their own choice in the case of granting access to gatekeepers. Besides providing authority on search engines, “gatekeeper” companies would also be liable to have at least 45 million monthly end users in the European region and 10,000 annual business users as these companies compete in a market of 75 billion euros with an annual turnover of 7.5 billion. Thus, the ultimate goal of the DMA is to set up a culture of accountability against such companies that promote unethical practices within the market and come up with unhealthy content.
To that end, these companies have an estimated time frame of around three months to bring themselves legally into good books, and two months would be required by the EU to review and come up with further proceedings related to their confirmation status. Implementation of any illegal policies on the apps, including Amazon, Facebook, Google, Microsoft, and Amazon, will be included under the sanctions posed by the EU on gatekeepers.
