The EU’s Digital Markets Act Provides a Boost to Smaller Competitors of Big Tech

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The EU’s Digital Markets: In order to meet the requirements of the landmark Digital Markets Act passed by the European Union, the largest tech businesses in the world are updating their primary online services. This could provide smaller competitors or even peers an advantage in the market.

The EU’s Digital Markets


In an effort to level the playing field for smaller competitors and, in the end, increase competition for Europeans, the DMA is Europe’s attempt to rein in Alphabet’s Google, Amazon, Apple, ByteDance (owner of TikTok), Meta Platforms, and Microsoft.

Some of the largest tech businesses in the world are under pressure from the new laws to simplify service provider switching for customers.

“The winners will be small European businesses which will get more options and more visibility than large companies,” noted Christophe Carugati of advice firm Digital Competition.

If a competitor’s Facebook Messenger or WhatsApp service satisfies Meta’s technological and security requirements, then Meta must ensure that its own services are compatible with it.

So, in theory, users of privacy-focused messaging apps like Signal and Telegram may soon be able to converse with their contacts on Messenger and Whatsapp without having to switch apps.

In its compliance report, Meta states that it is achieving a balance between protecting user privacy and security and making it possible for third-party providers to become interoperable with Meta.

Similarly, while configuring their phone, Google Android users will have the option to choose a default search engine. This is a huge potential for alternatives like Ecosia and DuckDuckGo, which prioritize privacy and the environment, respectively.

According to Sophie Dembinski, public policy head at Ecosia, “the proof of the pudding is always in the eating, and whether we see any meaningful changes in market share.” While the establishment of these new laws is a positive move, Dembinski stated that the real test will come when the rules are put into action.

In a blog post earlier this week, Google said that their search results are changing in a way that will benefit big intermediaries and aggregators at the expense of smaller businesses like restaurants, hotels, and airlines.
With the DMA’s new regulations on these corporations’ data use, EU consumers have also gained greater privacy rights.

Users can decouple their Instagram and Facebook accounts, for instance, to prevent data sharing for advertising and monitoring reasons.

Contests between app stores

Incumbent IT firms may face a decline in their market share as a result of the DMA, which opens up new channels for smaller competitors to reach customers.

The DMA could have the greatest negative impact on Apple since it compels the company to open up its profitable App Store, which is a chance that both larger tech companies and smaller startups will surely seize.
The DMA mandates that software developers be able to distribute their programs to EU users through channels other than Apple’s App Store.

New vulnerabilities in Apple’s iOS, Safari, and the App Store could expose users and developers to more forms of malware, fraud, scams, illegal and harmful material, and other security and privacy issues, according to the tech company.

Since Apple earns 30% commission on in-app sales, its detractors argue that the company is solely concerned with protecting its revenues.

A heated dispute has escalated between Apple and Epic Games, the developer of Fortnite and a longtime critic of the company, leading up to the new regulations’ introduction.

Fortnite was going to release its own app store for iOS devices in the European Union, according to the DMA. However, Epic’s Swedish developer account was suspended by Apple on Wednesday. Epic countered by saying that Apple had eliminated a major contender to its App Store by deleting it.

This matter, which may serve as a pilot program for the new regulations, is of the utmost importance to the Commission, which has requested an explanation from Apple.

Ethan Sullivan

Ethan's penchant for the pulse of the fashion world extends to covering lifestyle topics, offering readers a seamless blend of the latest style updates and lifestyle trends.

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