In the last two decades, digital platforms have become an integral part of our lives and it is difficult for us to imagine doing anything online without Amazon, Google or Facebook.
Currently, there are more than 10,000 online platforms operating in the European Union. Although the benefits of this transformation are evident, the dominant position achieved by some of these platforms provides them with a great advantage over their competitors, but also influences democracy, fundamental rights, societies and the economy.
Frequently, these platforms determine future innovations or consumers’ choices and act as “gatekeepers” between companies and Internet users.
To resolve this imbalance, the European Union is improving the rules which currently govern digital services. On 5th July, the European Parliament approved, by a large majority, the Digital Services Act and the Digital Markets Act.
Both laws had been proposed in December 2020 by the European Commission, being absolutely essential for protecting citizens in the online world.
In accordance with the Digital Services Act, online platforms such as social media, for example, will be obliged to protect users from illegal content and goods.
Furthermore, big online platforms and services will be subject to more stringent obligations, their level of responsibility being increased. Technology businesses will also have to be more transparent and take steps to prevent the spreading of misinformation.
The Digital Markets Act tries to put an end to the dominant position abuse of digital giants and to anti-competitive practices.
Specifically, the Digital Markets Act stipulates a set of clear rules which will be applied to large platforms (designated as “gatekeepers” or “access controllers”). These platforms will have to comply with said rules, otherwise they will be subject to millionaire fines, which could be as high as 10% of their total worldwide turnover, or even 20% in cases of systematic infringement.
Some of the rules to be complied with by these platforms are: (i) guaranteeing that cancelling the subscription of the platform’s essential services is as easy as activating their subscription; (ii) guaranteeing that the basic functionalities of instant messaging services are interoperable, that is to say, they allow users to exchange messages and send voice messages or files between messaging applications; (iii) providing business users with access to their performance data in respect of marketing or advertising on the platform; (iii) informing the European Commission in respect of acquisitions or concentrations carried out.
There are also limitations to their way of acting, which are likewise established in the Digital Markets Act, among them to the possibility of: (i) ranking their own products or services more favourably than the products or services of other operators on the market (self-facilitation); (ii) pre-installing certain applications or software and preventing users from easily uninstalling them; (iii) requiring that the most important software (such as web browsers) be installed by default when the operating system is installed; (iv) preventing programmers from using third-party payment platforms for sales carried out through software applications; (v) reusing, for the purpose of providing another service, the personal data collected when a different service was provided.
In addition to fines, if a behaviour of systematic infringement of rules is identified, the company may be subject to an investigation by the European Commission and to corrective or structural measures.
The European Executive body will now have to establish which companies will be bound by these rules, but the Big Tech companies, also known as GAFA (Google, Amazon, Facebook and Apple) or FAMGA (Facebook, Amazon, Microsoft, Google and Apple), will certainly be on this list.
The Digital Markets Act and the Digital Services Act will come into force during next year.
