iNews Vol 147
#CMOInsights
The EU's new Digital Markets Act (DMA) has just gone into effect, aiming to increase competition among major tech "gatekeepers" like Google, Apple, Amazon, Microsoft, and Meta. Billed as promoting fairness and consumer choice, the DMA requires these dominant platforms to:
?? Allow third-party apps, services and payment options
?? Avoid self-preferencing their own offerings/products
?? Enable data portability and interoperability
The rationale is to level the playing field for smaller innovators by undermining the gatekeepers' control over access to their massive user bases.
·?????? Apple has been robustly defending its compliance with DMA saying they have redesigned systems to ensure compliance whilst retaining user experiences built up over more than 15 years on iPhone. Key Apple changes include allowing third-party app stores, direct app distribution to users, and alternative payment options - though it added a new "Core Technology Fee" for very popular apps.
·?????? Google has enabled changes like removing pre-installed apps and new data consent flows but faces criticism that it hasn't gone far enough and argues it's balancing privacy/security considerations.
·?????? Microsoft has made Windows updates like enabling third-party default browsers/search engines, uninstalling certain apps, ring-fencing non-Microsoft app data, and giving LinkedIn options to disconnect data across services.
·?????? Meta launched an ad-free subscription while allowing users to unlink data across its apps.
·?????? Amazon is providing more ad pricing transparency and enabling independent ad campaign verification.
While well-intentioned, the landmark regulation is facing pushback over its one-size-fits-all approach and challenges in balanced implementation. The DMA brings significant challenges that counteract some of its pro-competition aims:
?? Fragmented User Experiences: Users face more friction as seamlessly integrated services are unbundled unless they opt-in to data sharing (which most still want per a survey).
?? Higher Costs for Small Businesses: New ad tracking restrictions could increase customer acquisition costs for small brands with limited budgets.
?? Cybersecurity Risks: Data silos undermine threat detection, while sideloading raises malware vulnerabilities (alarming governments).
?? IP & Privacy Risks: Mandating platforms share data/trade secrets raises IP theft and national security concerns.
The tech giants are pushing back in areas where rivals' demands arguably exceed DMA requirements. They're wary of being forced into fundamental product compromises that undermine user experiences and cybersecurity.
As regulators assess compliance, they must carefully weigh the trade-offs inherent in the DMA's broad remedies. Overreaching enforcement could stifle innovation, undermine cybersecurity and user privacy, while raising costs ultimately borne by European businesses and consumers.
Further reading:
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