Digital life | Giants forced to change

Tech companies learn to comply with global regulations




By Thursday, Google will have changed the display of certain search results. Microsoft will no longer force Windows users to use its Bing internet search tool by default. Finally, Apple will give iPhone and iPad users access to competing application stores and payment systems for the first time.

Tech giants have been preparing ahead of this Wednesday’s deadline to comply with a new European Union (EU) law intended to increase competition in the digital economy. This law, called Digital Markets Act (Digital Markets Act), requires the largest technology companies to review the functioning of some of their products in order to allow their smaller competitors easier access to their users.

These changes are among the most visible that Microsoft, Apple, Google, Meta and others have undertaken in response to a wave of new regulations and laws around the world. In the United States, some tech giants have said they will abandon practices that are the subject of federal antitrust investigations. Apple, for example, makes it easier for Android users to interact with its iMessage product, something the Justice Department has investigated.

“This is a turning point,” said Margrethe Vestager, executive vice president of the European Commission in Brussels, who has spent most of the last decade battling with tech giants. “Self-regulation is over. »

For decades, Apple, Amazon, Google, Microsoft and Meta went their way without many rules or limits. As their power, wealth, and reach grew, a groundswell of regulatory activity, law-making, and legal cases rose against them in Europe, the United States, China, India, Canada, South Korea and Australia. Today, the global tipping point for the mastery of the largest technology companies has been reached.

Companies have been forced to change the technologies they offer every day, including the devices and features of their social media services, which has been particularly noticed by users in Europe.

Companies are also making significant, less visible changes to their business models, agreements and data sharing practices, for example.

The degree of change is evident at Apple. The Silicon Valley company once offered its App Store as a unified marketplace worldwide, but it now has different rules for App Store developers in South Korea, the European Union and the United States. -United, due to new laws and court decisions. The company abandoned a proprietary iPhone charger design due to another European law, meaning future iPhones will come with a charger compatible with non-Apple devices.

Imposing fine

Apple was fined 1.8 billion euros ($2.7 billion) by EU regulators on Monday for hindering competition between rivals in the streaming business. music continuously.

The changes mean that people’s technology experiences will be increasingly different depending on where they live. In Europe, Instagram, TikTok and Snapchat users under the age of 18 no longer see ads based on their personal data, under a 2022 law called Digital Services Act (Digital Services Act). Elsewhere in the world, young people still see such advertisements on these platforms.

According to Greg Taylor, a professor at the University of Oxford who specializes in competition in technology markets, the technology industry is maturing and moving closer to the banking, automobile and health sectors, businesses adapting their products and services to local laws and regulations.

This represents a step change in the way we regulate the technology sector. Although the European Union is the first to act, other jurisdictions around the world are trying to do the same.

Greg Taylor, professor at the University of Oxford

However, even as big tech companies make changes, their smaller rivals, like Spotify, say much more government action is needed around the world to seriously tackle their vast power. Many companies continue to post record profits and sales. Microsoft, Meta, Amazon, Apple and Alphabet, Google’s parent company, have helped propel the stock market to new heights. Their combined market value has more than doubled since the end of 2019 to reach nearly US$10.6 trillion (over CA$14 trillion).

Even the policymakers behind some of the new rules said it was unrealistic to think the new laws and regulations would immediately dislodge dominant companies like Google or Apple. Andreas Schwab, a member of the European Parliament who helped draft the digital markets law, said it was hoped that over time the rules, if firmly enforced, would allow new entrants to emerge and develop.

“The breaking point will be when there is more competition and it’s not just a matter of modifying certain products,” said Mr. Schwab, who has visited Brazil, Japan, South Korea and Singapore over the past year to discuss new European Union technology rules. “Maybe a year from now we’ll say they were important or maybe a year from now we’ll say it’s a joke because the changes didn’t mean anything. »

Amazon, Apple, Google, Meta and Microsoft declined all interview requests.

Digital Markets Act

Few laws have forced tech companies to make as many adjustments as the Digital Markets Act. This EU law was passed in 2022 to prevent the biggest tech companies from using their interdependent services and deep pockets to lock out users and crush rivals. The law affects everything from online advertising to in-app payment methods to messaging apps. Violators face penalties of up to 20% of their overall turnover.

For more than a year, technology companies have been negotiating with EU regulators in Brussels about changes to their products, services and activities to become compliant.

In January, Google said it would reduce the visibility of its own services in search results and refer more to its rivals for queries on topics such as flights and restaurants. The company also pledged to allow European users to limit the sharing of their personal data between services such as Search, YouTube and Chrome, a change long called for by privacy groups.

That month, Apple said that in addition to the change allowing competing app stores and payment services, European customers with a new iPhone would see a screen allowing them to select a default browser, instead of the browser from Apple, Safari, which is automatically displayed by default on the iPhone.

Around the same time, the Digital Services Act, intended to combat illegal content online, also began to take effect. European users now have new tools to report toxic content. Online platforms such as Google and Meta can no longer allow advertisers to target users based on their ethnicity, political views and sexual orientation. TikTok and Instagram users can also choose to see tweets without any recommended content chosen by an algorithm based on their personal data.

Legal battles loom. Last month, the Supreme Court heard oral arguments on whether Texas and Florida could legally block sites like Facebook and TikTok from removing certain political content. If the states prevail, it will upend how online platforms can set the terms of engagement on their sites without interference from the U.S. government.

Nu Wexler, a former employee in the Washington offices of Google, Meta and Twitter, since renamed X, said tech companies were “making more concessions” and “being more pragmatic.”

They are simply “no longer as invincible as they were five years ago,” he added.

This article was originally published in the New York Times.

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