The EU’s new law could change everything about how you use your phone

Users might be able to send an iMessage from an iPhone to a user on WhatsApp, making it easier to break out of companies’ walled gardens

Adam Smith
Friday 25 March 2022 14:37 GMT
(Getty Images)

The European Union announced yesterday the Digital Markets Act – a new piece of legislation aimed at fixing what the bloc sees as imbalances in the technology ecosystem.

The announcement, ahead of the legislation’s final passing, would make several changes to how consumers use their technology.

This could include forcing platforms like WhatsApp, Facebook Messenger, and iMessage to communicate with one another and make it easier for users to choose their browser, virtual assistants, and search engines rather than being locked into the products from one company’s ecosystem.

What does the Act do?

The most recent update to the proposal states that the largest messaging services such as WhatsApp, Facebook Messenger, and iMessage will “have to open up and interoperate with smaller messaging platforms, if they so request.”

The Commission argues that this will give users more choice of which app to use, as they would be able to “exchange messages, send files or make video calls across messaging apps”. It has also been said that all communications must also be end-to-end encrypted.

It is possible that this could even come to social networks, although exactly what that would look like remains to be seen; legislators say that they will assess this option in the future.

It will also ensure that combining personal data for targeted advertising will only be allowed with “explicit consent” given from the user.

Technology companies will be limited to how many times they can ask for consent after it has been withdrawn or refused – to avoid them simply spamming their users until they relent.

There will be a requirement to “allow users to freely choose their browser, virtual assistants or search engines” – although whether that means Siri, Google Assistant, or Alexa might be built into the iPhone or Android devices is also unknown.

Other proposals, made from December 2020, include the right to uninstall pre-loaded software from their devices and that companies cannot use their platforms to put their products first.

This means that practises like Microsoft testing adverts for its own products in the file system of Windows 11, or Apple promoting its own Music service within the iPhone’s system settings could end.

Finally, additions have been made to allow app developers to access other smartphone functions such as the NFC chip, and access to marketing and advertising performance data.

Why is it being passed?

Large technology companies have been hit with allegations of anticompetitive practices numerous times.

At the end of 2020, a multistate lawsuit was made against Google for “anticompetitive conduct, exclusionary practices and deceptive misrepresentations,” which Google denies.

Last year, the Competition and Markets Authority (CMA) said it would be investigating Apple’s App Store to determine whether it is unfair that the only way of getting software onto an iPhone is through the company’s own walled garden – and ensuring that Apple takes a 30 per cent cut of every purchase.

Apple has said the App Store is “a safe and trusted place for customers to download the apps they love and a great business opportunity for developers everywhere”.

There is also the soft power that features such as iMessage has, especially in the United States. Its popularity, in comparison to WhatsApp in Europe and other areas, makes it more difficult for users to swap to a different platform because they would lose all their messages.

In April 2021, it was revealed through court documents that Apple could have made a version of iMessage that works on Android devices but chose not to in order to keep people buying iPhones. Google’s own Messaging app has only recently been updated to show message reactions from iPhones.

What happens if companies do not comply?

If a company does not comply with the rules, the Commission can fine it 10 per cent of its global revenue from the previous year – and double that to 20 per cent if it continues to flout the law. It could also ban companies from acquiring others for a certain period of time.

This is, however, primarily targeted at large “gatekeepers” rather than small companies – which the Comission is defining as providers of “core platform services” that are “most prone to unfair business practices, such as social networks or search engines”.

These companies would also have a market capitalisation of at least 75 billion euro or an annual turnover of 7.5 billion euros, and must also provide services such as browsers, messengers or social media with over 45 million monthly users in the EU.

“The Act will change the digital landscape as we currently know it. For middle-market businesses, it will open the door to new markets and advantageous opportunities, and when the Act becomes law, we will see mid-sized businesses reaping the benefits of this new digital space”, Marco Carlizzi, the head of legal at RSM Legal group, told The Independent.

“We are witnessing a shift from a punitive system, where large corporations are punished through fines and court systems, to one that also cuts the power off at the source. This new approach will facilitate the development of smaller digital companies that previously struggled to break into the market. This means the issue is being tackled head-on and in a way that will safeguard the interests of mid-sized companies.”

When is it coming?

It’s expected that the legislation will come into force by October this year after it has been finalised, but there has been some pushback across the Atlantic.

Some lawmakers in the United States have written to President Biden saying that “deeming certain U.S. technology companies as ‘gatekeepers’ based on deliberately discriminatory and subjective thresholds” is “unfair”.

But competing companies welcome this change, seeing it as a way of levelling the playing field.

“As one of the few competitors to Google still standing, Ecosia has campaigned tirelessly for users to have the choice online they deserve and not be restricted by the monopolies of big tech. Today European legislators have shown real leadership by setting a new standard in what is a landmark moment for EU regulation and internet users across the continent”, Sophie Dembinski, head of public policy for green search engine Ecosia, said.

“The EU must now follow through with enforcing these new rules effectively to truly address the systemic misbehaviour that has dictated the terms of digital markets not just in Europe but around the world.”

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