EU must enforce Digital Markets Act in the face of Big Tech obstruction

It is almost a year since six Big Tech gatekeepers had to start complying in full with the EU’s Digital Markets Act (DMA). The DMA requires Apple, Meta, Alphabet (Google), Amazon, Bytedance (Tiktok) and Microsoft to comply with a series of obligations and prohibitions to open up digital markets to more competition. A seventh gatekeeper, Booking, was added last autumn.

Where the gatekeepers have complied with the law, we are beginning to see the first green shoots of competition and exciting new options for consumers.

But, as expected, the gatekeepers are not giving up their stranglehold easily. In many cases, they are only partly complying, which undermines the effectiveness of the DMA. To make matters worse, several of these companies have complained to a much more protectionist US Government about being treated unfairly in the EU, which, over the weekend, the US has said it will investigate.

The EU stands at a crossroads – either enforce the Digital Markets Act and uphold the rule of law, or give up on its plan to open digital markets to more competition. At BEUC, we believe the EU must choose DMA enforcement to ensure consumers enjoy the benefits the DMA promised and to avoid losing its credibility.

The Digital Markets Act so far: the (mostly) good

First, the good part. Under the Digital Markets Act, Apple and Alphabet (Google) have had to relinquish control over the browsers pre-installed on users’ mobile devices. Both of their operating systems must now provide a neutral choice screen to allow users to choose freely from a selection of leading browsers. The same goes for the search engine. This is a big win for consumers, given how a company like Alphabet (Google) has done so much to subvert consumer choice while claiming the user is in control.

Although there are still some ongoing compliance issues, choice screens are good news for consumers. Those who want to use more privacy-friendly browsers or search engines can now more easily turn to Firefox or DuckDuckGo. People who do not want to use Google Search but rather a search engine that plants trees or supports causes that people care about can now more easily discover and choose an alternative such as Ecosia or Lilo respectively.

Another win in the making is the obligation for Alphabet (Google) and Apple to allow alternative app stores on mobile devices. In the last year, new app stores have launched in the EU including Epic Games and AltStore. There are still issues to iron out when installing an alternative app store, for example the excessive number of steps required. But it is definitely progress in the making if the Commission forces both gatekeepers to make the installation process frictionless.

Apple, as of this winter, finally started offering users the possibility to replace pre-installed apps with apps of their choice. You can now replace the camera, messages or mail apps, browsers and search apps on your device with the app of your choice and set that as your default. Although it is still a little cumbersome for our liking, this has certainly got easier.

Meta is working on plans to allow users of third-party instant messaging services to communicate with WhatsApp or Messenger users. This ‘interoperability’ could pry open the world of instant messaging, where network effects have meant almost everyone is on WhatsApp or Messenger, despite Meta’s privacy policy worrying many of its users.

The bad

However, we always suspected Big Tech would draw out their compliance with the Digital Markets Act as much as possible just as they have played games over the years to stave off compliance with competition law .

None of the gatekeepers fully comply with the obligation in the Digital Markets Act to obtain proper consent from users to use their personal data across gatekeeper services, or to combine it with data acquired elsewhere. Their choice screens use a mix of unclear or biased language, or brightly coloured buttons, to push users to accept the processing of their data by the gatekeeper. These behavioural techniques and interface designs harm consumers and clearly breach the Digital Markets Act’s Article 5(2) and Article 13, which prohibits  circumvention.

Meta’s choice screen, the pay-or-consent policy it rolled out, is particularly egregious.

Apple still makes it difficult for app developers to steer users to cheaper or better deals outside the App Store or Play Store, despite this practice being banned under the Digital Markets Act. Until last year, Apple would routinely block app developers from sharing information in app about cheaper offers outside its App Store, because subscriptions taken out via the App Store guaranteed Apple a steady revenue source in the form of a 30% commission. The result was that music streaming users or online newspaper readers, for example, subscribing to these services through Apple’s App Store were paying more than if they subscribed directly from the services’ own websites. Although that is no longer possible, Apple has come up with other fees to replace its lost income source – a particularly low blow which the Commission cannot let stand.

There are also real doubts whether Google and Amazon have stopped self-preferencing their own services in their search or product results. The Digital Markets Act requires they show proof they are not self-preferencing, and that evidence is still missing. Consumers should be able to see all kinds of offers from different providers which best respond to their search requests, not be led to focus on those of Google or Amazon.

Apple and Alphabet (Google) seem to use the excuse of protecting children to try to avoid compliance with DMA obligations, for example, to prevent the browser choice screen from displaying when the user is a minor. While protecting children is important, Apple cannot hide behind this to block users from choosing another browser than the gatekeeper’s when there would be other ways of protecting minors.

There are also many other non-compliance issues which the Commission needs to address (more here and here).  

The ugly

Big Tech has shown it will go to any lengths to prevent changes to how it operates in the EU. Their latest lobbying success is to turn to President Trump to help them with their various digital services and competition law compliance issues. They have unceremoniously pitched their problems as trade or tax problems, which they know will attract the new US administration’s attention. Donald Trump has said he won’t let the EU “take advantage of our companies.” But fines and penalties are not taxes. They are the consequence of breaking democratically adopted and sovereign laws.

The EU is not only legitimate in its attempt to open up digital markets, it is sovereign concerning its market of some 450 million consumers.

The DMA’s goal is to encourage more competition from innovative challengers, including those from the US. It must not yield to Big Tech’s games and must demonstrate that it will enforce its laws, if needed through deterrent fines. If companies choose to offer their services to EU consumers, regardless of their origin, they must comply with the law in the EU or face the legal consequences. Neither the US, nor any other foreign government, is entitled to prevent the EU from passing and enforcing laws to safeguard its 450 million consumers.

Innovation and consumer choice

As the gatekeepers increasingly comply with the DMA, we are bound to see more positive changes. We are likely to see more challengers emerge who can change digital markets for the better in terms of more innovation and better consumer choice.  That is why it is so important that the European Commission, as the enforcer of these rules, keeps up its enforcement momentum.

Stopping halfway and not letting the many potential benefits of the DMA see the light of day would be a huge mistake and damage the EU’s credibility at the very time the world outside the US is looking to Europe in dealing with closed digital markets and on maintaining the rule of law.