The EU Takes Another Jab at Big Tech With Flagship Digital Markets Act

In the last 12 hours, EU officials have agreed on two landmark rules: the Digital Markets Act and the revival of the transatlantic deal with the U.S. Thursday night, EU negotiators from the European Parliament and the Council finished legislation that aims to rein in the global digital market dominance by the world’s largest tech companies. The law fosters new competition to Big Tech companies like Meta, Google and Apple while revamping the online advertising ecosystem, app stores and digital messaging services. Leveling the playing field “The [legislation] puts an end to the ever-increasing dominance of Big Tech companies,” said a member of European Parliament Andreas Schwab. “They must show that they also allow for fair competition on the internet. The new rules will help enforce that basic principle.” Large messaging services like WhatsApp, Facebook Messenger or iMessage, would be required to interoperate with smaller messaging platforms upon request. For group chats, this requirement will be rolled out over four years. Global Digital Consumer Trends Index Reveals Privacy, Messaging and Loyalty Insights Going into effect later this year, the legislation includes platforms with a market capitalization of €75 billion or an annual turnover of €7.5 billion. Violators for repeat offences could face penalties of up to 20% of their global revenue, spilling over billions of dollars. Development on the transatlantic data deal Early Friday, the EU and the U.S reached a preliminary agreement to a new data-sharing pact. It's a replacement for Privacy Shield, which had been previously invalidated by EU regulators for the fear of data spying by the U.S government. “This framework underscores our shared commitment to privacy, to data protection and to the rule of law,” said president Joe Biden at a joint press conference with European Commission President Ursula von der Leyen. The authorization of data flow by the EU commission will help the U.S facilitate $7.1 trillion in an economic relationship with the EU. “Privacy professionals around the world can finally exhale,” said Caitlin Fennessy, vp and chief knowledge officer at the International Association of Privacy Professionals (IAPP). “When data can move in a legally compliant protected way, a business can move and individuals have greater trust in the services they use,” she adds. The decision by the EU commission that declared Privacy Shield invalid left a big hole in thousands of companies’ data transfer compliance programs, “a hole the industry alone could not fill since effective data protection in the national security sphere requires a government solution,” said Fennessy. Many companies across sectors in the U.S, including the ad-tech industry, saw a drop in EU business. Additionally, European data protection agencies issued orders that ceased using products like Google Analytics citing it as illegal and unsafe under the GDPR rulebook. Last month, Meta warned that it might discontinue Facebook in Europe over the legal uncertainty and tightening of the transatlantic data flow. The threat never materialized, however. While all looks promising to analysts and privacy experts, Max Schrems, the Austrian privacy lawyer whose name is synonymous with the previous strike down of the transatlantic data transfer, thinks otherwise. “This failed twice before. What we hear is another 'patchwork' approach but no substantial reform on the U.S. side,” he wrote on Twitter. “Let's wait for a text, but my first bet is it will fail again,” Schrems added.