Analysis: New EU rules regulating US tech giants are likely to set global standards

BRUSSELS, March 25 (Reuters) – Landmark EU regulations targeting Google, Amazon (AMZN.O), Apple (AAPL.O), Meta (FB.O) and Microsoft (MSFT.O) are likely to be around set a global benchmark and could even force the tech giants to be more innovative, lawyers and experts said.

Europe’s antitrust chief Margrethe Vestager won support from European Union members and EU lawmakers on Thursday for her proposal, the Digital Markets Act (DMA), to limit the tech giants’ powers through legislation for the first time, rather than lengthy antitrust investigations. Continue reading

The DMA establishes a list of do’s and don’ts that target each tech giant’s core business practices.

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“DMA is here to stay and will quickly be reflected in a number of countries. The flexibility that Big Tech had is being limited as the regulatory ‘straitjacket’ tightens around the world,” said Ioannis Kokkoris, professor of competition law at Queen Mary University in London.

Vestager’s move to legislation comes amid frustration at lagging antitrust investigations that provide remedies that have been criticized by competitors as inadequate, Google often being cited as an example, despite being fined more than €8 billion (8, 8 billion US dollars) was proven.

But the new rules also have the potential to spur more innovation amid tech giants’ concerns, said Nicolas Petit, professor of competition law at the European University Institute in Florence. It could even boost some companies’ business models, he said.

“I think the DMA indirectly values ​​business models based on subscriptions or device-level monetization. We could see more (increased) pricing and vertical integration into hardware in the future,” said Petit.

But enforcing the DMA will require a larger team than the small group envisaged by the European Commission, said Thomas Vinje, a partner at Brussels law firm Clifford Chance, who has advised competitors in cases against Microsoft, Google and Apple.

“The commission proposed to propose the DMA that it would be enforced by a team of 80 people. This will not be enough to enable effective enforcement,” he said.

“Another big question is who in the Commission will enforce it. Only DG COMP (Competition Officers) has the technical and industry knowledge and experience dealing with such companies to effectively enforce the DMA. If others in the Commission, like DG Connect (Digital Officials), are to enforce the DMA, it will be a dead letter.

The DMA is just the first step in ensuring tech giants act fairly, said Alec Burnside, a partner at law firm Dechert in Brussels.

“To begin with, DNA is not a perfectly formed panacea, and gatekeepers will no doubt try to circumvent it. Rome wasn’t built in a day, nor were the Highway Code perfect when they were first conceived,” he said.

“New road rules for the digital economy will be shaped in the coming period, and the DMA is a critically important first step.”

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Reporting by Foo Yun Chee; Editing by Kenneth Maxwell

Our standards: The Thomson Reuters Trust Principles.

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