Negotiators from the European Parliament and EU member states have agreed on new rules they hope will curb the dominance of Big Tech giants such as Google, Meta, Amazon and Apple.
The Digital Markets Act (DMA) is the EU's first overhaul of the rules governing competition on the internet in the last 20 years.
It would apply to “gatekeeper” firms – those with a value of more than €75bn, annual sales of €7.5bn and a minimum of 45 million monthly users.
Under the act, tech giants such as Google and Apple will be forced to open up their platforms and services to other businesses in a bid to both protect consumers and give internet rivals a better chance to survive.
"What we want is simple: fair markets ... in digital," said EU antitrust chief Margrethe Vestager. "The gatekeepers now have to take responsibility."
The main point of the law is to avert the years of procedures and court battles needed to curb Big Tech's monopolistic behaviour. While cases can end with huge fines, they rarely change how the giants do business.
Once implemented, Brussels will have unprecedented authority to keep an eye on decisions by the giants, especially when they pull out the chequebook to buy up promising startups.
"The agreement ushers in a new era of tech regulation worldwide," said German MEP Andreas Schwab, who led the negotiations for the European Parliament.
"The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies," he added.
'Concrete impacts'
The law contains about 20 rules, targetting practices that have gone against the bloc's antitrust rules, but which Brussels has struggled to enforce.
Apple would be forced to open up its App Store to alternative payment systems, a demand that the iPhone maker has opposed fiercely, most notably in its feud with Epic games, the maker of Fortnite.
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Google will be asked to offer people who use Android-run smartphones alternatives to its search engine, the Google Maps app or its Chrome browser.
Apple would also be forced to loosen its grip on the iPhone, with users allowed to uninstall its Safari web browser and other company-imposed apps that users cannot currently delete.
France, which holds the EU presidency and negotiated on behalf of the bloc's 27 member states, said the law would deliver "concrete impacts on the lives of European citizens".
"We are talking about the goods you buy online, the smartphone you use every day, and the services you use every day," said France's digital affairs minister, Cedric O.
Done #DMA! pic.twitter.com/ANXtiGr2iX
— Margrethe Vestager (@vestager) March 24, 2022
Cool reception
The law also wants to give users more choice in how they send messages, and forces messaging services such as Meta-owned WhatsApp and Facebook Messenger to make themselves available to users on other services such as Signal or Apple's iMessage, and vice-versa.
Apple quickly issued a statement saying it was "concerned that some provisions of the DMA will create unnecessary privacy and security vulnerabilities for our users".
A Google spokesperson said: "While we support many of the DMA's ambitions around consumer choice and interoperability, we remain concerned that some of the rules could reduce innovation and the choice available to Europeans."
Heavy fines
Violating the rules could incur fines of up to 10 percent of a company's annual global sales and even 20 percent for repeat offenders.
The Big Tech companies have lobbied hard against the new rules and the firms have been defended in Washington, where it is alleged that the new law unfairly targets US companies.
The DMA now faces final votes in the European Parliament as well as by ministers from the EU's 27 member states.
It could be effective on 1 January, 2023, though tech companies are asking for more time to implement the law.
