Digital Markets Act: Big Tech’s pushback faces up to a bold EU

As the EU heads into a new mandate, all of its energies will be focused on enforcing its new tech rules. High among those, the Digital Markets Act, the EU’s attempt to curb Big Tech power. For the past year, we have seen the EU regulator boldly using it. Industry lobbies will argue the EU has gone too far. Yet, much more is still needed.

What is the Digital Markets Act?

The Digital Markets Act (DMA) embodies the EU’s effort to restrict Big Tech’s power to exploit smaller competitors, reliant business users, and, in certain instances, end users.

The DMA established do’s and don’ts(opens in new window) for all companies identified as ‘gatekeepers.’ In this context, a gatekeeper refers to an economically dominant company that acts as an intermediary between business users and end users. For example, Apple’s App Store connects app developers with iPhone users. Apple’s power has enabled it to impose a 30% fee on app developers for every purchase made within the App Store or through in-app payments.

The new regulations were meant to loosen Big Tech’s control by requiring gatekeepers to open up certain services such as app stores and messaging, enhance transparency on advertising, refrain from prioritising their own products, and stop using business users’ data to compete against them.

For the end users, the regulations meant Big Tech companies had to obtain user consent before using data collected from one service (e.g., Google Search) for another (e.g., YouTube) for advertising.

Most notably, the DMA established mechanisms for the EU Commission to examine companies’ practices and monitor implementation, including gaining access to data and algorithms. Systematic non-compliance entails substantial penalties, and in extreme cases, the EU Commission can force structural remedies.

Big Tech’s Battle Against the DMA

Big Tech companies anticipated the possible consequences of the Digital Markets Act and took action to prevent it. Google, for example, developed a strategy (opens in new window) to resist Commissioner Breton’s purported endorsement of breakups. At the same time, Apple lobbied(opens in new window) to introduce safety exceptions to the rules requiring it to open its App Store. They partially succeeded in these instances but could not derail the bill.

The next stage was then to prepare for implementation. Big Tech companies hired extensive legal teams and boosted their lobbying efforts in the EU. In contrast, the DMA unit tasked with regulating them is significantly under-resourced, with only about 80 staff members. This under-resourcing could hinder the unit’s ability to effectively monitor and enforce the Act, especially given the vast resources and influence of the Big Tech companies.

The DMA’s implementation phase

The DMA took effect in May 2023. Since then, there have been several milestones in its enforcement.

The EU Commission announced in September 2023 (opens in new window) that it had identified Alphabet, Amazon, Apple, ByteDance (TikTok), Meta, and Microsoft as gatekeepers for a total of 22 services, including search, advertising, marketplaces, app stores, and messaging. These gatekeepers then had six months to inform the Commission about their plans to comply with the new measures and provide a detailed report on their user profiling techniques. Redacted versions of these reports were made public. This was followed two weeks later by a series of public workshops(opens in new window) in which the gatekeepers were required to justify their compliance measures in front of competitors, user associations, and civil society organisations.

Simultaneously, the Commission initiated non-compliance investigations against Alphabet, Meta, and Apple and began new investigative steps concerning Amazon. In May 2024, the Commission also classified the European hotel platform Booking as a gatekeeper and commenced an investigation into X.

All of this has moved remarkably fast for the typically slow and bureaucratic EU. It notably contrasts with the decade-long investigation into Google’s dominance or the fact that, six years later, Meta still does not comply with data protection rules. This speed is in part explained by the design of the DMA itself. As a targeted ex-ante system that clearly defines what companies can and cannot do, it eliminates many strategies firms use to evade regulatory compliance. Additionally, the EU Commission has shown political determination to demonstrate that the Digital Markets Act is not merely symbolic and to establish itself as the top Big Tech regulator.

However, not all has been perfect. Initial designation, for example, was criticised(opens in new window) for excluding cloud services (which are dominated by Microsoft, Amazon, and Alphabet), email providers like Gmail and Outlook, and virtual assistants from the roster of core platform services.

Big Tech’s fight against the Digital Markets Act

Some companies challenged even the notion that they should be covered by the new rules. For instance, ByteDance, the owner of TikTok, has taken legal action to contest its designation and resist disclosing the profiling techniques it employs on its users. TikTok lost this challenge in July as the European Court of Justice dismissed(opens in new window) its claims for lack of substance. Meta and Apple have also challenged the inclusion of certain services. These legal battles are currently ongoing. However, it’s worth noting that the DMA has an interesting characteristic: legal challenges by companies do not delay the implementation of the rules.

Another challenge appeared when it came to compliance. Apple, in particular, became notorious for its plans on how to comply with opening up the App Store. As per the rules, Apple would now enable app developers to bypass its 30% fee. However, it would now introduce a new tax of 50 cents per installation for any app receiving over 1 million downloads. Apple has also implemented technical obstacles to deter users from using alternative app stores. Civil society organisations have complained(opens in new window) that in effect Apple was trying to circumvent the new rules and keep total control of the App ecosystem.

Apple echoed its successful lobbying efforts, which associated openness with a lack of safety, to justify these actions. However, developers have called the company’s plans “abusive(opens in new window) .” The new fees imposed by Apple can accumulate rapidly; in fact, Meta CEO and founder Mark Zuckerberg doubted(opens in new window) that any app developer would opt to utilise the new options due to their “onerous” nature.

In turn, Meta, the parent company of Facebook, Instagram, Messenger, Marketplace, and WhatsApp, revealed its intention to comply with the DMA by introducing a Pay or Consent model(opens in new window) . The company argued that this model would allow EU-based users who prefer not to have their personal data used for surveillance advertising across Meta’s services to opt out by paying a subscription fee. Conversely, users who consent to surveillance advertising would continue to access the services for “free.”

As expected, digital rights organisations promptly lodged complaints, and the European Data Protection body declared that such a binary approach violates EU rules. Interestingly, consumer rights bodies, including BEUC, discovered that Meta still failed to uphold their data rights regardless of whether users consented or paid.

While some have pointed out Big Tech’s legal challenges and poor compliance with the new rules as proof that the DMA does not work, most observers expected that Big Tech companies would fight the rules.

DMA enforcement: regulators take up the fight

Despite Big Tech companies’ poor compliance, the regulator have so far been up to the challenge. Shortly after the compliance plans were publicly disclosed, the Commission declared that it was initiating investigations into non-compliance (opens in new window) against Apple, Meta, and Alphabet. Simultaneously, it announced it was taking investigative measures on Amazon’s compliance.

In June 2024, Apple became the first company to be preliminarily found of non-compliance with the Digital Markets Act by the European Commission . If the Commission confirms its preliminary findings, by March 2025, Apple could receive a fine of up to 10% of its worldwide revenue, around EUR 35.7 billion.

This ruling marks the beginning of a new phase in DMA enforcement. The EU has demonstrated its commitment to using its new tool and has been unafraid to assert its authority. However, there’s no denying that the DMA will demand substantial resources to manage ongoing interactions with gatekeepers and users, ensure compliance and access information, develop technical expertise, and manage legal challenges.

Civil society organisations, academics, businesses, and end users can contribute to the implementation by collecting evidence and publicly highlighting instances of non-compliance. Public legitimacy of enforcement will be crucial to maintain pressure on the firms.

Limiting the power of Big Tech will take more than the DMA

The immense power of Big Tech poses a significant challenge to societies worldwide. Addressing this issue will require more than just a single piece of legislation.

The DMA is an important step forward but will not rein in Big Tech on its own. Amazon is resounding illustration of this. After years of investigation and initial findings of the company’s abuse of power over its platform sellers, the EU DG Competition agreed to Amazon’s settlement to close the investigation with the condition that the company would adjust its practices. However, in March 2024, just 13 months later, the Commission’s DMA unit revealed that it had initiated a fresh investigation into Amazon’s mistreatment of sellers. Yet, these new steps do not tackle Amazon’s power over sellers’ pricing, growing fees for sellers, potential impact on the economy, and its intentional monopolisation strategy.

Beyond the DMA, the EU has displayed positive signs by utilising its core competition tools, including merger control during the review of Amazon’s takeover of iRobot and abuse investigations such as the ongoing investigation into Google’s advertising services which has preliminarily found a break-up was needed. The EU needs to keep up and expand this pressure.

With Big Tech companies’ ongoing takeover of artificial intelligence (AI), we can see gaps in the DMA’s gatekeeper logic. While the DMA possesses the inherent capacity to adapt by incorporating new products and practices, it is unlikely that this will be a current priority. Moreover, based on Cecilia Rikap’s work(opens in new window) , it becomes evident that some of the tactics employed by Big Tech to control AI innovation—such as utilising cloud access, directing innovation and knowledge through venture capital, acquiring AI talent, and influencing academia— are not covered by the DMA’s gatekeeper framework.

A combination of antitrust tools, including the Digital Markets Act and older tools, such as merger reviews, competition investigations, and public utilities laws, will be needed to dismantle Big Tech’s power. Simultaneously, investing in and supporting genuine alternatives will be necessary to cultivate a diverse and decentralised digital sphere.

As a new EU policy cycle commences, Big Tech and its lobbying network will likely argue that the EU has again overstepped its bounds. In response, we must be the resounding voice reminding everyone that there is still a long journey ahead.