Lawyers and experts said EU Landmark rules targeting Alphabet units of Google, Amazon, Apple, Meta and Microsoft are likely to set a global standard and could force changes in the tech giants’ business models.
Europe’s antitrust chief Margrethe Vestager won the support of EU members and EU lawmakers on Thursday for her proposal, the Digital Markets Act (DMA), to rein in the tech giants’ powers through legislation for the first time, rather than protracted antitrust investigations.
Dynamic Mechanical Analysis (DMA) identifies a list of things to avoid that targets the core business practices of every technology giant.
“DMA is here to stay and it will quickly reverse in a number of countries. Ioannis Kokoris, a professor of competition law at Queen Mary University of London, said the flexibility that big tech had had will be constrained, as “regulatory constraints” would become more stringent globally.
Vestager’s turn to the legislation came amid frustration with slow antitrust investigations that present treatments that competitors have criticized as inadequate, with Google often cited as an example despite being hit with fines of more than €8 billion ($8.8 billion).
The new rules may motivate tech giants to rethink their strategy on long-term goals and trade in their business models for others.
“If successful, DMA will put pressure on the monopoly rents of gatekeepers in inverted markets, thus encouraging them to move toward long-term innovation goals,” said Nicholas Petti, Professor of Competition Law at the European University Institute in Florence.
“I think DMA indirectly puts a premium on business models based on subscriptions or monetization at the device level. We may see more (increased) pricing, and vertical integration into devices in the future,” he said.
However, implementing the Urban Areas Act (DMA) would require a larger team than the small group planned by the European Commission, said Thomas Fengy, a partner at Brussels law firm Clifford Chance who has advised competitors in cases against Microsoft, Google and Apple.
“The committee suggested when proposing the DMA that it would be enforced by a team of 80 people. He said this would not be sufficient to enable effective implementation.
Another big question is who on the committee will enforce it. Only DG COMP (Competition Officers) have the technical and industry knowledge and experience in dealing with such companies to apply DMA effectively. If there are others on the committee, like DG Connect (the digital administrators), who are going to enforce DMA, that will be a dead letter.”
Alec Burnside, a partner at the Brussels-based law firm Dechert, said the DMA is just a first step towards making sure the tech giants are playing it fair.
“DMA is not a panacea from the start, and without a doubt the gatekeepers will try to circumnavigate it. Rome was not built in a day, and the motorway icon was not perfect when it was first envisioned,” he said.
“New road rules for the digital economy will be formulated over the coming period, and DMA is a very important first step.”
Kokoris said there may be some wiggle room for the tech giants to avoid the full impact of DMA.
“The degree of negative impact on big technology will depend on the extent to which they can convince the committee that there is no anti-competitive effect,” he said.
.
[ad_2]
