Analysis: New EU rules regulating US tech giants set to set global standard


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

European antitrust chief Margrethe Vestager won support from European Union members and European lawmakers on Thursday for her proposal, the Digital Markets Act (DMA), to limit the powers of tech giants via legislation to the first time, rather than lengthy antitrust investigations. Read more

The DMA compiles a list of do’s and don’ts targeting each tech giant’s key business practices.

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“DMA is here to stay and will be quickly replicated in a number of countries. The flexibility big tech had will be limited as the regulatory ‘straitjacket’ tightens globally,” said Ioannis Kokkoris, Professor of Competition Law at Queen Mary University. in London.

Vestager’s move to legislation came amid frustration over slow antitrust investigations that offer remedies criticized by rivals as inadequate, with Google often held up as an example despite more than 8 billion euros (8.8 billions of dollars) in fines.

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

“I think DMA indirectly places a premium on subscription-based business models or device-level monetization. We may see more (increased) pricing and vertical integration into hardware in the future,” he said. said Small.

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

“The Commission suggested during the DMA’s proposal 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 within the Commission will enforce it. Only DG COMP (responsible for competition) has the technical and sectoral knowledge and experience to effectively enforce the DMA. If d “Others in the Commission, like DG Connect (digital civil servants), have to enforce the DMA, it will be a dead letter.”

DMA is just the first step in making sure the tech giants are playing fair, said Alec Burnside, a partner at law firm Dechert in Brussels.

“DNA is not a perfectly formed panacea from the start, and no doubt the guardians will try to circumvent it. Rome was not built in a day, and neither was the rules of the road perfect when it was designed,” he said.

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

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Reporting by Foo Yun Chee; Editing by Kenneth Maxwell

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