EU lawmakers have approved the final versions of the Digital Markets Act (DMA) and the Digital Services Act (DSA), the landmark pieces of legislation that aim to rein in the power of Big Tech.

EU parliament voted overwhelmingly in favour of the acts. The (DMA) received 588 votes in favour, 11 votes against and 31 abstentions. The (DSA) was voted in with 539 in favour, 54 votes against and 30 abstentions.

These two laws aim to impose stricter rules around tech competition and rein in the monopoly that Big Tech holds in Europe’s digital space.

European commissioner for Internal market Thierry Breton shared the result on Twitter, describing it as “historic” and a “landslide vote”.

Historic!

Congratulations to the European Parliament for adopting both the #DSA & #DMA today.

It’s a landslide vote! pic.twitter.com/d6w4gLh0hn

— Thierry Breton (@ThierryBreton) July 5, 2022

“For the 1st time ever, the European Commission will become the supervisor of “gatekeepers” and very large platforms and online search engines,” Breton said on Twitter.

The Digital Markets Act

The DMA aims to blacklist certain practices used by large ‘gatekeeper’ platforms – companies that wield a disproportionate amount of power in their markets – and enables the European Commission to carry out market investigations and sanction non-compliant behaviours.

Under the new law, companies that are marked as gatekeepers will have to allow third parties to “inter-operate” with their own services, in order to give users greater choice and prevent them from being restricted to key apps or platforms.

Gatekeepers will no longer be able to rank their own services or products more favourably than third party equivalents, prevent users from using third-party apps or process users’ personal data for targeted advertising (unless consent is explicitly granted). The proposals of the DMA has previously led to clashes between EU lawmakers and large tech firms.

“The purpose of the digital single market is that Europe gets the best companies and not just the biggest,” said DMA rapporteur Andreas Schwab MEP. “This is why we need to focus on the legislation’s implementation. We need proper supervision to make sure that the regulatory dialogue works.”

The Digital Services Act

The core principle of the DSA is that what is illegal offline will be illegal online. It sets out to make the internet safer with new rules for all digital services, from social media platforms to search engines to online marketplaces and more.

The DSA follows in the footsteps of the General Data Protection Regulation (GDPR), another watershed piece of EU legislation.

But where GDPR focuses on data protection and privacy and the Digital Markets Act takes aim at the market dominance of Big Tech, the focus of the DSA is illegal content and the protection of users’ rights.

The obligations under the DSA include new measures to counter illegal content online and obligations for platforms to react quickly. The law also aims to impose an increased transparency and accountability on platforms, such as by making them provide clear information on content moderation or the use of algorithms for recommending content.

The illegal content targeted under the DSA is broad and sweeping. It includes hate speech, child sexual abuse material, scams, non-consensual sharing of private images, promotion of terrorism, the sale of counterfeit or unsafe products and copyright infringement.

Speaking after the final vote, DSA rapporteur Christel Schaldemose MEP said the DSA gives platforms “the chance to regulate and adjust”.

“We are not defining what is illegal and what is not legal,” Schaldemose said. “We are saying that if it is illegal, it needs to be taken down.”

Enforcement concerns

There has been some criticism around the approved acts, with Patrick Breyer MEP saying the DSA has “failed” to be the promised gamechanger to overcome “pervasive tracking online” .

“We failed to provide you with alternatives to toxic platform algorithms that will push the most controversial and extreme content to the top of your timelines”.

European commissioner Margrethe Vestager has set up a DMA taskforce with around 80 officials expected to join, but critics such as Schwab have called for a bigger taskforce to counter Big Tech, Reuters reported.

What happens next?

Once the DMA is adopted by the Council of the European Union in July and the DSA is adopted in September, both acts will enter into force twenty days after their publication.

The DMA will start to apply six months following its entry into force. Companies will have a maximum of six months after they have been designated as gatekeepers to comply with the new obligations.

The DSA will be directly applicable across the EU and will apply fifteen months after the entry into force. For very large online platforms and search engines, the DSA will apply four months after they have been designated as such by the Commission.

The introduction of new digital legislation could have a knock-on effect across the Atlantic, as happened with the implementation of GDPR. There are legislators in the US who have been calling for tighter regulation of online platforms and other prominent figures who support such measures.

In May, a group of MEPs went to Silicon Valley to exchange views on the EU’s digital policy agenda with tech companies such as Google, Meta, Apple, Airbnb, eBay, PayPal and Uber.

The month before, former US president Barack Obama spoke of the need for regulation to tackle disinformation while former presidential candidate Hillary Clinton was cheering the DSA over the line.

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