Next week, a law takes effect that will change the internet forever—and make it much more difficult to be a tech giant. On November 1, the European Union’s Digital Markets Act comes into force, starting the clock on a process expected to force Amazon, Google, and Meta to make their platforms more open and interoperable in 2023. That could bring major changes to what people can do with their devices and apps, in a new reminder that Europe has regulated tech companies much more actively than the US.
“We expect the consequences to be significant,” says Gerard de Graaf, a veteran EU official who helped pass the DMA early this year. Last month, he became director of a new EU office in San Francisco, established in part to explain the law’s consequences to Big Tech companies. De Graaf says they will be forced to break open their walled gardens.
“If you have an iPhone, you should be able to download apps not just from the App Store but from other app stores or from the internet,” de Graaf says, in a conference room with emerald green accents at the Irish consulate in San Francisco, where the EU’s office is initially located. The DMA requires dominant platforms to let in smaller competitors, and could also compel Meta’s WhatsApp to receive messages from competing apps like Signal or Telegram, or prevent Amazon, Apple, and Google from preferencing their own apps and services.
Although the DMA takes force next week, tech platforms don’t have to comply immediately. The EU first must decide which companies are large and entrenched enough to be classified as “gatekeepers” subject to the toughest rules. De Graaf expects that about a dozen companies will be in that group, to be announced in the spring. Those gatekeepers will then have six months to come into compliance.
De Graaf has predicted a wave of lawsuits challenging Europe’s new rules for Big Tech, but says he is in California to help make clear to Silicon Valley giants that the rules have changed. The EU has previously levied big fines against Google, Apple, and others through antitrust investigations, a mechanism that put the burden of proof on bureaucrats, he says. Under DMA, the onus is on the business to fall in line. “The key message is that negotiations are over, we’re in a compliance situation,” de Graaf says. “You may not like it, but that’s the way it is.”
Like the EU’s digital privacy law, GDPR, the DMA is expected to lead to changes in how tech platforms serve people beyond the EU’s 400 million internet users, because some details of compliance will be more easily implemented globally.
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Tech companies will also soon have to grapple with a second sweeping EU law, the Digital Services Act, which requires risk assessments of some algorithms and disclosures about automated decision making, and could force social apps like TikTok to open their data to outside scrutiny. The law is also to be implemented in stages, with the largest online platforms expected to have to comply in mid-2024. The EU is also considering passing specific rules for artificial intelligence, which could ban some use cases of the technology.
De Graaf argues that tougher rules for tech giants are needed not only to help protect people and other businesses from unfair practices, but to allow society to receive the full benefits of technology. He has been critical of a nonbinding AI Bill of Rights recently released by the White House, saying that a lack of firm regulation can undermine the public’s confidence in technology. “If our citizens lose trust in AI because they believe it discriminates against them and leads to outcomes that are harmful to their lives,” he says, “they are going to shun AI, and it will never be successful.”
The EU’s new office opened after recent moves by the bloc and the US to collaborate more on tech policy. De Graaf says both sides are interested in finding ways to address chip shortages and the ways authoritarian governments can leverage technology and the internet.
He’s also planning a trip to Sacramento to meet California state lawmakers who he says have been trailblazers in standing up to Big Tech. They passed a bill last month requiring strict default privacy settings for children and controls on how companies use data they collect about kids. The US Congress has passed relatively little legislation affecting the tech industry in recent years, aside from the $52 billion CHIPS and Science Act in support of semiconductor production in July.
Marlena Wisniak, who leads work on tech at civil liberties group the European Center for Not for Profit Law, takes the EU’s new presence in the tech industry’s backyard as new proof it is serious about shaping tech policy globally. She says de Graaf should use some of that power to benefit people reliant on Big Tech platforms outside the US and EU, who are rarely represented in tech diplomacy.
Wisniak also hopes the EU’s digital emissaries can avoid falling into traps that have derailed the plans of some previous newcomers to Silicon Valley, a place with many more executives, entrepreneurs, and investors than policy experts. “I hope that EU policymakers don’t get dazzled by the tech hype,” she says. “The tech bro narrative is real.”