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  • Writer's pictureCommercial Awareness

EU Big Tech Antitrust Laws

Stephanie Lai, Head of Research at King’s Commercial Awareness Society

The European Union (EU) has passed the Digital Markets Act (DMA) and the Digital Services Act (DSA), which aims to respectively ensure competition in the tech market which is dominated by a few large firms, and limit disinformation. The obligations under these acts are expected to be implemented and enforced over the next year and a half.

Understanding the antitrust laws:

Large tech firms have faced criticism for limiting competition from entering the market through anti competitive behavior which displays monopolistic tendencies. The monopolistic tendencies typically result in lower output, and higher prices, disadvantaging the market and consumers. Hence, the DMA and DSA are applied to companies that are worth more than 75 billion euros, secure sales that surpass 7.5 billion euros and attract more than 45 million users every month. This is aimed to reform the market as previously anti-competitive behavior was handled on a case-by-case basis.

For example, Apple may have to allow other payment options for their App store, and not limit payment methods to Apple’s own system, relating to a similar high level anti-competitive court case in the US in early 2022 between Epic Games and Apple. Likewise, Google may be forced to offer alternatives to the Chrome browser.

For society:

The DMA and DSA may cause reforms for messaging between people on different platforms such as iMessage and Whatsapp, as the DMA and DSA endeavor to give more choice on how messages are sent, and increase the choice of digital aspects such as search engines. There will also potentially be options to have different operating systems, especially after Google was fined 4.125 billion euros for their use of the Android operating system in efforts to beat competition.

For the private sector:

The companies in question will need to consider their operations and be sure to continually comply to avoid hefty fines of upto 20% of their global revenue, or even risk being broken up. However, some nations have highlighted that they lack the expertise and resources to ensure that these big tech companies will take the DMA and DSA seriously. The EU has since responded that each platform will have a legal representative to aid in holding the companies accountable, and that bodies such as NGOs may aid in enforcing the DSA.

These acts have been received with disdain as these large companies view them as a punishment for their successes, and fear that it may limit choice in the EU if alternative technology brands do not gain popularity, especially as many customers are satisfied with the products they have. These harsh laws, in combination with the current turbulent economic climate, may further contribute to the slowing in momentum of big tech stocks, which had previously seen large gains, until factors, such as supply chain issues caused large losses.

The private sector, especially services that specialize in cross-business harmonization and communication, have great opportunity from the regulation forcing cross-company talk about instant messaging services to reach interoperability. The likely effect of this is increased competition from big tech firms as users will have a greater ease in using any messaging services, suggesting a potential implementation of methods to advertise unique selling points of the various services.

Future Developments:

There will be greater competition, which will increase innovation as firms will be pushed to improve their product to be more attractive, and increase their popularity. There will also be an increased number of competitors as big tech companies as anti-competitive behavior is being limited, this includes vertically with-in brands, such as Google Maps on a Google phone.

Further, as the US is implementing similar anti-trust bills for big tech, there will be an overall large impact on the operation and market share of big tech firms.

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