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EUROPEAN UNION INQUIRY ON ALPHABET, META, AND APPLE: A DEEP DIVE INTO DIGITAL MARKET TENSIONS

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The European Commission has recently launched an in-depth investigation into tech giants Apple, Alphabet, and Meta to assess the compliance of their services with the Digital Markets Act.

Concerning Apple and Google (owned by Alphabet), the executive arm of the Union is scrutinizing whether these companies allow developers to direct users to alternative app stores besides their own. As for Meta (owner of Facebook, Instagram, and WhatsApp), the investigation focuses on whether users are provided with sufficient choices regarding the use of their personal data for advertising and commercial purposes.

WHAT IS THE DMA (DIGITAL MARKETS ACT) AND WHO ARE THE SO-CALLED “GATE KEEPERS”?

The Digital Markets Act (DMA) is an initiative of the European Union aimed at reducing the concentration of power in the hands of tech giants, known as “gate keepers,” eliminating abuses of dominant positions, and fostering greater competition.

To achieve these goals, the EU has identified so-called “gate keepers,” which are tech companies with at least 45 million active users per month (and 100,000 business users per year) in the European Union, a market capitalization of at least €75 billion, and annual revenue of €7.5 billion.

In addition to the companies under investigation by the Commission the above mentioned requirements are met by Amazon, Microsoft, and Bytedance (the Chinese company that owns TikTok and the only non-U.S. company identified by the EU).

IMPLICATIONS AND POTENTIAL OUTCOMES OF THE INVESTIGATION

The European Commission’s investigation into Alphabet, Meta, and Apple serves as a catalyst for increased regulation of the tech market through the adoption of stricter regulations aimed at ensuring fair competition and protecting consumers.

To comply with the DMA, these tech giants are required to make significant changes to the services they offer in sectors such as search engines (Google Search), social networks (Facebook and Instagram), e-commerce (Google Shopping), browsers (Safari and Chrome), and instant messaging (WhatsApp and Messenger).

The specific aim is to provide greater transparency to users and open the doors of the digital market to other potential competitors.

Those who fail to comply with the new rules set by the European Union will face hefty fines, up to 10% of their annual turnover, which can rise to 20% in case of repeated offenses.

CONCLUSION: THE FIGHT FOR A FAIR DIGITAL MARKET

The Commission’s investigative activities – far from being an onslaught against tech industry giants – represent a fundamental step towards creating a fairer digital market that promotes competition and, therefore, ensures access even to smaller companies capable of providing alternative services to consumers.

In this regard, European Commissioner for Digital Thierry Breton has expressed confidence in market changes, albeit expressing reservations about the solutions proposed by Alphabet, Apple, and Meta to comply with DMA obligations.

It is indeed desirable that a fairer market translates into fairer services for consumers, who should always be empowered to know and choose, in an informed manner, the product that best meets their needs and expectations.

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