On December 15, the European Commission presented a proposal that includes two different regulations in the digital field: the Digital Services Act (DSA) and the Digital Markets Act (DMA). As with any Regulation proposed by the European Union, there are different points of view to consider: we are faced with long and complex issues, difficult to reduce to a few lines. For those wishing to have a more complete idea of what we are talking about, we recommend reading the pages of the Union website, in Italian, with the draft of the Regulation which is however in English.
The European Union with the DMA aims to regulate the so-called “digital services” and to downsize the role of the giants of the web to facilitate competition.
To be precise, the Digital Markets Act (DMA) which aims to regulate the so-called “Gatekeepers”, those companies that today have a key role and control over some fundamental aspects of digital life, such as application stores or research on the web.
The two proposals, once approved, they will become directly applicable in all Member States, like all EU Regulations: it was so for that of the Free Modem, it will also be so for the Digital Markets Act.
However, there is a problem, and not a small one: if the European Union is convinced that its solution is correct, many authorities are not of the same opinion who have drawn up a series of reports in recent months that explain how Digital Markets Act it will end up worsening the experience of all consumers.
Matt Brittin, President, EMEA Business & Operations of Google, tried to explain it to us on the sidelines of a meeting, and although Google is one of those “gatekeepers” that the European Union wants to regulate it is essential to listen to Google’s point of view to understand what we will face if the DMA is approved without changes.
What the European Union asks of gatekeepers
Let’s start first from the Digital Markets Act, from what the European Union asks and from who the “Gatekeepers” are. The European Union sees the Gatekeeper as a large portal providing basic services, and to be defined as such this portal must have a capitalization of over 65 billion and will have to earn a total of 6.5 billion a year in the European Economic Area for the last three years. A huge figure, which reduces the search to five names in the world, all American companies: Google, Amazon, Facebook, Apple and Microsoft.
They are joined by two potential European companies, which still do not fall within the limits but could become so soon: Spotify and Zalando.
Under the new regulation, Gatekeeper would be subject to a series of obligations and prohibitions that would facilitate competition according to the European Union. For example, it should ensure interoperability between its services and those provided by third-party platforms and above all it should provide the data generated by the companies in the use of the platform, including advertisements.
Businesses could not prevent third party companies from interacting with consumers outside their platform (e.g. sites that prevent you from contacting the seller directly) and they should favor third party services over their own.
It’s not just that of course: DMA would force platforms to do not cross-reference the data of their own services, and this is a key point. Within one of the most complete assessments of the impact of the DMA on trade in Europe prepared by Copenhagen Economics, we find some examples showing what the consequences on users of the application of these rules can be, and later we will try to better frame the question .
Take for example Article 5a of the European proposal, the one that prevents Gatekeepers combine and cross-exploit data from different services on the same platform. The case below refers to Google, and in the photo on the left we see what Google shows today if we look for a museum.
We are shown the map, which comes from Google Maps, videos, reviews, search results, and all these data come from different Google services. Google could no longer use its services to make all this information, and the result that the user would be faced with if DMA were approved in Europe would be the screen on the right.
“A more modern and structured regulation – spiega Brittin – it would allow us to continue innovating on Search beyond 10 blue links, allowing us to continue developing new features and products. “
Indeed, if you look at the research screen if the new regulation were applied, it seems to have gone back 15 years.
Google is not against DMA, Matt Brittin pointed out, but believes that at the moment the way this Regulation is structured may represent more of a problem for consumers than an opportunity. “We want to ensure that with the Digital Market Act our European users can benefit from a first-class internet experience, not a second-class experience.”.
The question, if desired, is much broader, because according to Google, the technological innovations that have made in recent years to web search not only guarantee users a better experience and therefore a richer result, but they also help companies. “European small and medium-sized enterprises want tools to help them expand and grow their businesses, especially at this time of recovery. This is why we want to be able to keep innovating and developing new products and features that help our customers. We want to ensure that basic free features, such as maps in research that were so vital during the pandemic, do not need to be eliminated.”.
There is also an element of security to all of this, and it’s about browsing protection and protection within app stores.
Among the consequences of the DMA reported in the Copenhagen Economics report, the Apple App Store is taken as an example, with Apple following the new rules it should allow the complete uninstallation of any pre-installed app and ensure user access to the operating system, hardware and software. Obligations that, according to the same research, would lead to a degradation of the quality of the stores and an enormous risk to safety.
Brittin himself explains why this is a real risk: “Keeping all users safe and secure while browsing online is important, something we’ve been working on since the early days of Search. This is why we want to ensure that key products and features are protected within the confines of the Digital Market Act, and that impacts on user experience and security are minimized..”
This is because SafeSearch, the Google Search and Google Images feature that acts as an automatic filter for pornography and potentially offensive and inappropriate content, it could no longer be integrated into Google as it is a Google service itself. The DMA would ban it.
The same thing also applies to Play Protect, which is the system that today scans Play Store apps and therefore prevents users from downloading scam applications and apps containing malware. Today the system, present on the Google Play Store, is the only defense available for hundreds of millions of users who use an Android smartphone.
Google, if the Digital Market Act were to be approved in its current form, would be forced to renounce the Play Protect within the Play Store as can be seen from the simulation that Google itself has provided us.
“More choice is good for consumers. We want to be able to continue building new products and innovating in ways that are good for consumers. It is reasonable for companies to be scrutinized, but all companies – regardless of size – should benefit from legal certainty to create and build new products and services. The Digital Market Act limits our ability to make changes to our products or introduce new features”Concludes the Google executive, who hopes that the Union may decide to change the rule before approval.
There is obviously one thing to consider in all of this: Google is a company that made a huge amount of money by leveraging all the data that research generated, and it is thanks to these data and their connections that such comprehensive research can today provide.
According to the Digital Market Act, companies like Google cannot integrate multiple services from the same company, because this behavior closes the doors to other competitors. Google, if desired, however, he may integrate maps from another provider, TripAdvisor reviews, Vimeo videos into his search, or it could use a tool developed by a company that makes anti-malware products to scan the Play Store. That would ultimately also be the purpose of DMA.
The problem is that Google is not obliged to do so, and Google itself does not see why the rules should apply to it (and to a few other companies) and not to everyone. Precisely for this reason, given that there is no obligation, if things do not change Google will do in Europe what the Union prescribes, that is, avoid integrating its services. With all the risks there are, including those for users. We have seen some scenarios above.
The DMA has not yet been approved, and Google, but it is not the only one, hopes it can be revised. There are good and valid elements, but there are also some points that really risk creating more inconvenience than advantages. In addition to the document cited above, there is also a second analysis entitled Economic Analysis of Digital Markets Act which explains how in the end the current rules have not prevented many realities, starting from scratch, from becoming internationally established realities, a sign that in the end the “Gatekeepers” have so much power. They have it, they are giants, but only in their sphere and certainly not in the European global panorama.