Apr 7, 2022 - Technology

EU hopes for "compliance" with new tech rules rather than breakups

Photo of Margrethe Vestager gesturing while speaking

Photo by Thierry Monasse/Getty Images

Europe's big new tech regulations aim to get full compliance from Big Tech, not to break up big companies, Europe's top competition official Margrethe Vestager said Thursday.

Driving the news: Vestager, who serves as European Commission Executive Vice President and competition commissioner, talked to Axios' Ashley Gold and Dan Primack during a Twitter Spaces event Thursday on the heels of European lawmakers' finalizing the Digital Markets Act.

Why it matters: Major U.S. tech companies are under threat of breakup via lawsuits from American regulators and bills circulating in Congress, and that's the outcome favored by many of the strongest critics of Google, Apple, Meta (Facebook) and Amazon.

How it works: For big companies, complying with the EU law will include:

  • sharing data with smaller companies;
  • making sure messaging apps work together with smaller competitors;
  • asking users for their permission to share data;
  • not preferencing their own services over those of competitors; and
  • allowing users to pick default apps on their devices.

Context: The Digital Markets Act sets criteria for companies to be designated as "gatekeepers" subject to its rules.

  • It's likely that Google, Meta, Apple, Amazon and Microsoft will fall under the DMA's obligations. Vestager said it's likely some Chinese and European companies will be deemed gatekeepers as well.

What they're saying: "I hope to see compliance. I hope to see changes in the businesses that will be designated as gatekeepers — which also means that I hope we will not get to the situation where the tool to break up a company will be used," she said.

  • Breakups take a long time, she said, and she prefers businesses who are subject to the new law comply quickly, instead of "forcing us to go to really high fines, and eventually to use the tools of breakups."
  • "Compliance is opportunities — particularly, opportunities for smaller businesses."

Be smart: The EU could make business difficult or impossible in its jurisdiction for the tech giants if it wanted to. But it likely doesn't have the power on its own to break up a company that's based in the U.S.

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