EU establishes strict regulations for US tech giants amid their growing influence on the market
The EU announced that strict regulations aimed at major US tech companies will come into force in October.
According to the Digital Markets Act proposed by EU antitrust chief Margrethe Vestager last year, Meta, Apple, Amazon, and Google will have to significantly change their business models in the EU.
"With the processes foreseen, these pieces of legislation, well, they will have been voted in and publicised in the Official Journal, so coming into force sometime in October," Vestager said during a news conference, according to Reuters.
The new rules aim to prevent the tech giants from dominating the digital market and make it easier for users to switch providers. As such, they will be prohibited from setting their software as a default option on a device or prioritizing their products over others. They will also be required “to embrace interoperability,” meaning that different apps will have to work together and potentially exchange data.
Apple commented that – to some extent – the new rules might lead to “unnecessary privacy and security vulnerabilities,” CNBC reports.
Failure to comply will cost companies up to 10% of their annual global turnover in fines or 20% for repeated offense.
In the meantime, it’s not just the EU that keeps an eye on the influence of tech on the market. A few days earlier, Federal Reserve Chair Jerome Powell announced that digital currencies would need additional regulations as they pose a threat to the U.S. financial system.
“Our existing regulatory frameworks were not built with a digital world in mind,” he said, AP reports. “Stablecoins, central bank digital currencies, and digital finance more generally, will require changes to existing laws and regulation or even entirely new rules and frameworks.”
Powell suggested that while modern technologies will make online transactions more efficient and cheaper, the country will face the risk of digital currencies destabilizing the financial system.
President Joe Biden has previously signed an executive order requiring the Federal Reserve to make a risk-benefit assessment of creating the central bank’s own digital currency. However, the decision has not yet been reached.