As regulators push to tighten controls over tech giants, big tech companies are expected to challenge the new Digital Markets Act, which aims to level the playing field.
The legislation focuses on so-called “gatekeepers,” large tech platforms that connect consumers with services like Apple’s App Store, Google’s search engine and Facebook’s messaging platform.
The European Union has rolled out landmark rules aimed at curbing the dominance of tech giants, a move that could put an end to years of Big Tech control over digital markets. The new law, known as the Digital Markets Act (DMA), seeks to level the playing field for start-ups by putting a stop to unfair practices.
Google, the American search engine company founded by Larry Page and Sergey Brin, is expected to be a key challenger in the DMA. The firm, which has an estimated 70 percent share of the world’s online searches, is a complex enterprise that offers its users a variety of products and services.
In addition to the company’s main product, Google Search, the firm is also a video and music streaming service, a cloud computing provider, an advertising company and a fitness watchmaker. All of these product lines offer Alphabet a wide array of avenues to lock in potential and existing customers, as well as increase opportunities for monetisation.
Apple
Apple is one of the world’s largest technology companies, generating US$400 billion in global revenue. Its iPhone sales are a major part of that revenue, but its apps and services are growing rapidly as well.
The company has a wide range of products and services, including Apple Pay, Siri, Apple Music, Apple TV, and Apple News. Several of these are facing legal challenges and increasing competition from rivals.
This has led to the digital markets act, which aims to make big platform holders like Google and Apple more accountable. It requires them to make their devices and services more open, to share their data with third parties, and to enable more app stores.
European regulators say they want iMessage, WhatsApp and other messaging platforms to “open up” and interoperate with smaller competitors, so users can choose the apps that suit them best. If Apple does not comply, it could face fines of as much as 20% of its global annual revenue for repeated violations.
Amazon
Amazon has become a formidable competitor thanks to its low prices, endless selection and continuous stream of novel products. Its nonstop experimentation is an essential ingredient to its business model, which Bezos borrows from business consultant Jim Collins’s famous “flywheel” philosophy.
Its success is rooted in its ability to leverage network effects, extreme returns to scale and data to generate enormous levels of revenue. This, in turn, allows it to fend off competitors with ultra-low pricing and high margins.
But Amazon has also developed an antitrust problem because it often stifles competition. This can be seen when it buys rivals to compete with them, or when it pays a percentage of profits to Apple and Google to remain the default search engine on their devices.
But with the Digital Markets Act now in effect, European lawmakers have given Europe’s antitrust chief Margrethe Vestager a new tool to rein in market dominance by large technology platforms. The legislation aims to make it easier for start-ups to innovate and compete with big tech, while also giving consumers more choice.
Microsoft
Microsoft Corporation is a global technology company that has long been a dominant force in the computer industry. It is best known for developing the Windows operating system and the Xbox gaming console system, but it also offers cloud services such as Azure.
The company has also launched a number of consumer-oriented products, including the Surface tablet line and the Windows Phone mobile operating system. It has also entered the public cloud market with its Azure platform, and it recently launched a cloud-based business collaboration software tool called Microsoft Teams.
The digital markets act, a landmark piece of EU legislation that will come into force in November 2022, aims to curb the power of platform giants and protect consumers from their unfair practices. It will prevent companies that are designated as gatekeepers from collecting personal data about end users without their consent. Those companies that break the rules could face fines of up to 10 percent of their worldwide turnover and up to 20% for repeat offenders.