Europe starts a new Digital Era

04.04.2022

Europe starts a new Digital Era

Google

Big Tech companies (Google, Apple, Amazon, Meta, Microsoft) have contributed to the development of the European digital landscape, but at the same time, their business models have hampered the fair access of consumers and businesses to it. A new European digital law will now change that.

On 24 March 2022, EU lawmakers agreed on a new law, the Digital Markets Act, to limit the market power of big online platforms. It only affects companies with €7.5 billion in annual turnover and certain products that reach both 10,000 businesses and 45 million monthly active users in the EU. With close to 450 million EU citizens, it is fair to say that such companies have a decisive impact on the European digital economy and deserve a special set of rules.

Decades ago, Europe led the Industrial Revolution and was a relevant global player. However, it has become clear that the rules of European competition law were insufficient to provide a stable framework for the digital economy. We needed the European way of shaping the digital revolution with the values of the Social Market Economy model where the legislator, not the strongest player, sets the rules of the game in markets. As digitalisation progressed, Big Tech companies created products and technologies that enriched the lives of European citizens and its economy. Everyone felt that digital tools were an essential part of every aspect of life during the COVID-19 lockdowns.

But, there is always a “but”. A few large tech companies have become enormously powerful and are not always acting with consumers’ best interests in mind. The digital giants set the rules of the game in the markets they created. Therefore, these big companies have become dominant. Big Tech companies are only getting bigger, but not necessarily getting better.

The business models of the Big Tech corporations have always aimed at favouring products and services in their own product ecosystem. Thereby, the digital giants were able to prevent them from growing or driving them out of the market. Take for example Google’s control over the Android App Store payments system. With the new rules of the Digital Markets Act, Google will have to allow app developers to offer payment services other than Google Pay if the developers want to offer their apps in Google's app store. Moreover, Meta, the parent company of Facebook, owns both WhatsApp and Facebook Messenger. Almost every European who is on the internet uses them. The new law will allow other, smaller messengers to interconnect so that the best messenger in Europe can grow on the network of the giants. This would give users more choice and break the dominance of Meta over messaging.

With the Digital Markets Act, Europe finally makes good on its promise - both offline and online.

The Digital Markets Act will break open some markets that the largest tech companies control for their own benefit. Europe will make sure that businesses can compete freely and in a fair way both offline and online. The European Parliament was a co-author of the law. As Parliamentarians, we made sure that small businesses benefit from the rules and that consumers are better protected in the digital sphere. Importantly, we avoided over-regulation by only focusing on the biggest companies - the Digital Markets Act creates opportunities for innovation, but no red tape for businesses in Europe.

Since its founding, one of the EU’s promises is to provide fair competition rules for everyone and a secure environment for consumers. Both Big Tech and small companies have to abide by these values. Europe's message is clear: what has been unfair offline, must be unfair online. With the Digital Markets Act, Europe finally makes good on its promise - both offline and online.

Note to editors

The EPP Group is the largest political group in the European Parliament with 176 Members from all EU Member States

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