The European Union is currently working on a proposal to reform the digital market and data sharing methods. According to a “Financial Times” report, the early draft of the “Digital Services Act” under consideration by the European Parliament not only requires technology companies to share data with small competitors but also restricts the way companies use collected customer data.
According to the proposal, technology companies that may act as gatekeepers “may not exclusively pre-install their own applications, nor may they request any third-party operating system developer or hardware manufacturer to exclusively pre-install the gatekeeper itself…”. The draft also stipulates that gatekeepers are also not allowed to use data collected on their platforms to lock users. If they share the data with rival companies, then they can use it. Simply put, the EU does not want smartphones to arrive with “undetectable apps”.
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There are some things in the draft that seem to be objected by all major US technology companies. Apple and Google are likely to oppose the terms restricting pre-installed applications on the hardware. This is because iPhone and Android devices are equipped with a set of integrated first-party applications. Furthermore, these applications are undeletable. Apple is also very likely to oppose another provision. This is the provision that prohibits technology companies from blocking alternative app stores or payment methods. This is also the core of the current dispute between Epic and Apple. Also, Google, Facebook, and Amazon are likely to oppose sharing information with competitors’. These companies consider this information to be proprietary.
EU has not been successful in enacting these laws
The EU has tried many times before to strengthen competition in the digital market. However, its efforts have always been futile. Due to a large-scale antitrust case, Google has to provide Android users with an opportunity to choose the default search provider. However, other search engine alternatives have to go through an auction process. An independent search provider DuckDuckGo has sharply criticized this process after losing to Microsoft’s Bing this week.
According to the “Financial Times” report, in the documents submitted to the bill, Google refuted the idea of the gatekeeper company. Google said, “The digital ecosystem is extremely diverse and develops rapidly. If you refer to the status of the entire company or enterprise group, it would be misleading to evaluate the title of the goalkeeper.”
