Brussels intensifies its crusade so that big technology companies comply with regulations

Brussels has been fighting for three years to ensure that large American technology companies—and, lately, also Chinese ones—do not go beyond community laws, but in recent months it has accelerated the pace even more. The progressive deployment of the two regulations approved more than a year ago – the digital services (DSA) and the digital markets (DMA) – meets milestones, and has given way to chapters like the one from a few years ago days, when the European Commission accused Apple of breaking up competition. The next day it sent a statement of objections to Microsoft for abusing its dominant position following, this time, the old law to control fair competition in the markets, making it clear that it is not giving up any tool in this fight.

September 6, 2023 was an important dayThe European Commission identified the first digital market operators to which it would require additional obligations due to their large size and, therefore, potential risk: Amazon, Alphabet, Apple, Meta, Booking, Microsoft and Bytedance. Six months later, on March 25, the first accusations came. The Commission suspected that Apple, Alphabet, Amazon and Meta were not complying with the DMA and began to open several investigations that it wanted to have completed within a year from that moment. In the case of Apple, the preliminary conclusion came very quickly: just three months later.

“There is indeed an acceleration of the pace with the DMA on large technology companies. The new rule allows it, facilitates it and that is what we are seeing with this Commission and we will see with the one to come,” says Cecilio Madero, former Deputy Director General of Competition at the Commission and now senior consultant at APCO Worldwide.

“The DMA is designed, both procedurally and substantively, to allow for very rapid investigations. In contrast to what happens in Competition cases, in DMA proceedings the European Commission does not have to define markets, identify a dominant position, establish a risk of anti-competitive effects or assess whether the conduct is justified or benefits consumers. This, together with a reduction in certain procedural guarantees considered non-essential, is what allows the Commission to act much more quickly,” he points out. Alfonso Lamadrid, partner of Garrigues in Brussels and professor of Competition and DMA procedures at the College of Europe in Bruges, the training ground for civil servants of the European institutions.

Agrees with these two experts José Rivas, lawyer specializing in Competition and co-director of the Bird & Bird law firm, who basically says that what the rule does is reverse the burden of proof. The goal would be to avoid what has been happening until now: from the beginning of an investigation until it was concluded (with sanction, with compensatory measures or with a menu of both), the market had completely changed and the initial objective no longer had effect. real.

The other digital standard has also recently made news. More focused on content than on the proper functioning of the market, The DSA is the tool with which Brussels compels the major Internet players to fight to avoid false information, to protect minors, to veto hate messages or misleading advertising. With it, a few weeks ago it demanded information from the three major pornographic platforms (Pornhub, StripChat and XVideos) to know what they do to ensure that minors do not access inappropriate content. And before that, at the end of April, it achieved the first major victory of this regulation when a file was opened to TikTok for its rewards program in France and Spain. Two days later, the Chinese company decided to suspend it, although the file is still open.

The initial path of both regulations is similar, although sector experts point out that the regulation for digital services will, over time, generate more conflicts with companies than that of the markets. They point out that there will be a lot of litigation at the beginning, but once it has been implemented and adopted—and the elements of conflict have been clarified in the courts—it will generate fewer clashes.

But now all eyes in the sector are on this regulation and on the proceedings that Brussels has opened with Apple. For Rivas, from Bird&Bird, this is the real test of the new regulation for digital markets. “It is a case in which Brussels is taking a risk, as it did with Microsoft decades ago. The DMA is a new way of presuming infringement. If Apple wins, everything is called into question. There can be no greater challenge.”

This lawyer echoes statements that have been heard in Brussels for months: while the other large technology companies seek to adapt to the new competition rule by negotiating with the Commission and with the third-party companies affected, the great California giant would have chosen to resist further. Sources from the Commission itself, close to the Competition Department, admit it. They point out that it is not that the rest do not resist and willingly accept the new obligations, but they point out that Apple is more reticent.

The tech firm rejects this: “Over the past few months, Apple has made a number of changes to comply with the Digital Markets Act (DMA) in response to feedback from developers and the European Commission. We are confident that our plan complies with the law, and we estimate that more than 99% of developers would pay the same or less commissions at Apple under the new commercial terms we created.” The company refers to the latest open dispute. But it comes to explain the same thing when it speaks in a generic way, pointing out that on January 5 of this year it announced its plan for compliance with European standards. And, despite this, just 10 days ago, Apple announced that for the moment it was not going to offer its Artificial Intelligence developments in Europe due to regulation.

And while the DMA is deployed, traditional Competition rules continue their course, this time more slowly. Much more. With this legal tool, Brussels has presented the statement of objections against Microsoft for including the Teams meeting, calling and productivity application in its Office 365 and Microsoft 365 application packages, which would give it an advantage over competitors such as Webex, Zoom or Slack. In March it punished Apple with 1.8 billion for market abuse in the distribution of music through the network. And the major Brussels case against Google “for abuse of dominant position” in the digital advertising market is still pending for more than a year. In it, the Commission has preliminarily concluded that the situation can only be resolved through “mandatory divestment”, that is, forcing Alphabet, Google’s parent company, to sell part of the business.

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