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As Big Tech scrambles to meet EU rules, investigations seen as likely
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As Big Tech scrambles to meet EU rules, investigations seen as likely
Mar 6, 2024 11:21 PM

BRUSSELS, March 7 (Reuters) - From overhauling online

platforms to backroom engineering, Google, Apple ( AAPL ), Amazon ( AMZN ),

Microsoft ( MSFT ), Meta and TikTok owner ByteDance have scrambled over

the last six months to comply with landmark EU tech rules that

come into force on Thursday.

The Digital Markets Act (DMA) is one of the most

comprehensive regulatory actions to rein in so-called "Big Tech"

and is expected to reshape the global technology industry after

decades of unfettered growth.

Criticism from rivals and users and cautionary comments from

watchdogs suggest a couple of the six companies may be in the

regulatory crosshairs over potential non-compliance in the

coming months.

If any of the six tech giants are not compliant with the

Digital Markets Act (DMA) by the EU's Thursday deadline, they

could face fines up to 10% of their global turnover.

Apple ( AAPL ) is the most affected by the DMA, which forces

the iPhone maker to open up its closed ecosystem such as

allowing software developers to distribute their apps to users

in the European Union outside of its own App Store.

Yet its introduction of new fees such as a "core technology

fee" of 50 euro cents per user account each year even if

developers opt not to use Apple's ( AAPL ) App Store or payment system

has already caught EU antitrust chief Margrethe Vestager's eye.

Vestager said on Monday that novel fee structures should not

undermine the incentives for businesses to switch to rivals,

after handing a 1.84 billion euro ($2 billion) fine to Apple ( AAPL ) for

thwarting Spotify ( SPOT ) from showing other payment options

outside its App Store. Apple ( AAPL ) has said it will appeal the

decision and declined to offer further comment.

Rivals such as Swiss email service Proton, meanwhile, have

said Apple's ( AAPL ) compliance efforts do not go far enough.

With eight core platform services subject to the DMA, more

than any other company, and despite putting thousands of tech

engineers to work on its compliance efforts, Alphabet's

Google also runs the risk of a potential

investigation.

The company's mandatory overhaul of its search results will

benefit aggregators such as Booking.com and Expedia ( EXPE ),

which will gain more prominence and hence online traffic due to

their intensive lobbying with Google.

That has already caused friction with hotels, airlines and

restaurants, with some expecting to lose as much as 50% of their

online traffic and possibly millions of euros in revenues as

users are lured to large online intermediaries. Google declined

to comment.

Meta, which said Instagram and Facebook users will

be asked if their data can be shared between its services, could

also run the risk of an investigation. Meta declined to comment.

Microsoft ( MSFT ), Amazon ( AMZN ) and ByteDance may face

less scrutiny initially as EU regulators focus their resources

on one or two cases and ensure a case able to withstand a legal

challenge, people familiar with the matter said. Microsoft ( MSFT ) and

Amazon ( AMZN ) declined to comment while ByteDance did not respond

immediately to a request for comment.

Pressure for an EU investigation is also coming from the

some of the big six companies themselves.

At least one has told the European Commission that it was

not fair to have to play by the DMA rules while a rival flouts

them, one person with direct knowledge of the matter said.

Unlike EU antitrust investigations which can take years to

wrap, DMA enforcers have just a year to issue their findings.

($1 = 0.9173 euros)

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