European Parliament ratifies landmark DMA and DSA laws to rein in tech giants
While the rules have been approved, lawmakers remain worried about their enforcement
The European Parliament approved two historic rules on Tuesday to regulate tech giants like Amazon, Google, Microsoft, Apple and Facebook after months of negotiations and procedural hurdles.
The Digital Markets Act (DMA) and Digital Services Act (DSA) are meant to address "the societal and economic effects" of the tech industry by establishing clear guidelines for how it should conduct business and offer services within the EU, in accordance with the EU's fundamental rights and values.
The proposals seek to prohibit the use of some of the most intrusive kinds of targeted advertising and deceptive practices, in addition to promoting fairer competition and enhancing protections for individuals' privacy.
On Tuesday, the European Parliament conducted the final vote on the DSA and DMA, after a political deal was reached between Council and the Parliament on 23 April and 24 March, respectively.
The DMA was approved with 588 votes in favour, 11 against and 31 abstentions.
The DSA received 539 votes in favour, while just 54 votes were cast against it. Thirty people did not vote.
The DMA is a piece of antitrust law that aims to make it simpler for smaller and medium-sized businesses to compete in industries that are dominated by tech giants. By taking away some advantages enjoyed by big firms, the DMA intends to encourage competition in the industry.
The law will target tech companies known as 'gatekeepers': firms worth more than €75 billion (£63 billion), with at least €7.5 billion (£6.3 billion) annual sales and 45 million monthly users in the EU.
Under the proposed rule, they would not be able to rank their own items or services higher in internet search results than those of others, nor would they be able to reuse data collected from different services. The largest messaging services —Facebook Messenger, WhatsApp, and iMessage — would be required to interoperate with smaller rivals, if they make a request.
For DMA violations, companies risk penalties of up to 10% of their annual worldwide revenue.
The DSA focuses on online platforms like Google, Amazon and Facebook and intends to combat hate speech, disinformation, the sale of unsafe products, and other abusive online behaviour like the spread of revenge porn.
It will make big digital platforms liable for any unlawful content uploaded to their platforms, and push these firms to more actively police their platforms over such content.
DSA violations may result in penalties of up to 6% for firms.
The European Commission has established a taskforce, and some 80 officials are anticipated to join it; however, critics argue that this number is insufficient.
Thierry Breton, the head of industry for the European Union (EU), attempted to address concerns regarding enforcement by stating that various teams would focus on different issues during the implementation of the rules.
These issues include risk assessments, interoperability of messenger services, and data access.
In order to compete with Big Tech's extensive legal teams and vast finances, lawmaker Andreas Schwab has advocated for a larger taskforce.
After being officially approved by the Council in July (for the DMA) and September (for the DSA), both acts will be published in the Official Journal of the EU, and they will come into effect 20 days after the publication date.
The DSA will be directly applicable across the EU and take effect 15 months after it enters into force, or on January 1, 2024, whichever comes later.
With respect to the responsibilities that must be fulfilled by very big online platforms and very large online search engines, the DSA will take effect sooner - four months after the Commission has recognised it.
The DMA will go into effect six months after it becomes law. The gatekeepers will have a maximum of six months after they have been designated to adhere to the new requirements.