European Union Approves New Digital Market Act

European Union negotiators have revealed the final details of a new law that will force major changes in the way European tech companies operate, imposing heavy fines or, in extreme cases, banning the worst offenders from the acquisition. The new Digital Market Law, approved by negotiators in Brussels on Thursday, targets so-called gatekeeper companies, platforms such as Facebook and Google, and has the power to control distribution in the market.

The legislation will take effect next year. It will be applied to companies such as Amazon, Meta, Alphabet Inc, Microsoft, Apple Inc and Booking Holdings Inc online marketplaces Zalando and Alibaba could also be affected by the new legislation. 

Officials have said that they need new tools like the Digital Market Act, to successfully break what the EU says is a stranglehold on digital ecosystems by a handful of giants. 

Great web giants like Amazon and Google have been the target of antitrust investigations from Brussels, but these proceedings have been postponed in court for years and put into corporate action. 

Andreas Schwab, the parliamentarian in charge of writing the rules, said in a statement, “From now on, digital companies must show that they allow fair competition on the internet.” He further said, “This means that the time of long antitrust cases, during which the authorities were lagging behind the big tech companies, is over.”

Meanwhile, some of the leaders in the industry believe that the Digital Marketing Act can cause problems for users and can also be a financial hit for companies. Others claim that forcing messaging apps including WhatsApp or iMessage to be interoperable will affect encryption, or stifle iterative product design that is a hallmark of Silicon Valley entrepreneurship.