EU's 2025 Digital Market Act Targets Big Tech with Fines up to 10% Revenue

European Commission unveils robust measures to regulate digital market gatekeepers

Major technology firms such as Google and Facebook are set to face significant penalties under new comprehensive regulations introduced by the European Union in 2024, designed to ensure a competitive and transparent digital environment.

On Tuesday, the European Commission presented two pivotal proposals aimed at safeguarding consumer rights and promoting fair competition across digital platforms throughout the EU.

Margrethe Vestager, Executive Vice-President for the Commission’s Europe Fit for the Digital Age, emphasized, "Our goal is to guarantee users access to a diverse range of secure online products and services while enabling businesses to compete fairly both online and offline within Europe."

The European Parliament and member states will now engage in the standard legislative process to discuss and refine these proposals.

Key Highlights

• Introduction of two major proposals to foster a fairer, more transparent digital marketplace
• Potential fines and structural measures for Big Tech companies failing to comply

Digital Markets Act (DMA)

The DMA targets the unfair practices of dominant tech firms acting as "gatekeepers" in the digital economy, which can hinder competitors from reaching consumers effectively.

Under the DMA, companies operating search engines and social media platforms must ensure third-party software functions seamlessly and users retain control over pre-installed apps, including the ability to uninstall them.

Non-compliance could result in fines up to 10% of a company’s global turnover, with repeat offenders facing possible structural remedies such as divestitures.

Digital Services Act (DSA)

The DSA introduces strict rules for the removal of illegal content and goods online, protects users against wrongful content removal, and requires large platforms to proactively mitigate risks of abuse.

It also mandates transparency in online advertising and algorithmic processes to increase accountability.

Thierry Breton, Commissioner for Internal Market, stated, "These proposals will shape our digital landscape for decades, ensuring security, trust, innovation, and fair business opportunities across Europe through harmonized rules and effective enforcement."

Big Tech's Response

Tech giants have voiced concerns, with Google highlighting potential restrictions on integrating data like restaurant locations and booking options, which could affect user experience.

Others warn that stringent competition and content moderation rules might hinder innovation or lead to excessive content removal, impacting free speech.

Conversely, Facebook expressed support for the EU's approach, recognizing it as a positive step toward preserving the internet’s beneficial aspects.

Global Regulatory Trends

These EU proposals align with increasing global scrutiny of Big Tech. The UK recently announced fines up to £18 million ($24 million) or 10% of global turnover for failing to promptly remove illegal content.

Simultaneously, Facebook faces lawsuits from the US Federal Trade Commission and state attorneys general seeking to reverse acquisitions that allegedly reduce market competition.

In the US, legislative bodies continue exploring reforms to prevent digital monopolies, while top executives from Twitter, Alphabet, and Facebook defend critical legal protections shielding platforms from liability.

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