New law that regulates the operation of digital titans comes into force in the EU

The ambitious Digital Markets Law (LMD), which regulates the activity of technology giants in the European Union (EU) to create a more competitive environment in the sector, comes into force this Thursday.

The LMD establishes special rules for six supergiants – the five American companies Apple, Alphabet (Google), Amazon, Meta (Facebook and Instagram) and Microsoft and the Chinese ByteDance (TikTok) -, which will be subject to permanent supervision.

In a statement, the European Commission – the executive arm of the EU – noted that “from today” [jueves] those six giants”must fully comply with all their obligations” provided for in the law.

In addition to defining a list of what these firms can do in the European space, the LMD grants the European Commission the power to impose enormous fines and even determine the division of the firms.

The six giants will have to inform Brussels about any purchases, as well as offer European users more options when choosing web browsers or search engines.

Starting today, the six companies must prove their adjustment to the LMD and present “an independently audited description of the techniques used to profile users, along with a non-confidential version”.

These reports will be “carefully analyzed” by the Commission, which will thus decide whether the measures implemented by the companies “they are effective” to achieve the objective of complying with the law.

“The Commission will not hesitate to take action, using all available tools to ensure compliance with the LMD“said the statement.

In the event of non-compliance, the Commission may apply fines of up to 10% of a company’s global annual turnover, a penalty that could reach 20% in the event of repeat offences.

In cases of systematic violation of the regulations, the Commission may decide to sell a part of the responsible company, by vetoing new acquisitions.

In the note, the European Commissioner for the Internal Market, Therry Breton, said that the day “marks a turning point for the European digital space”, with the entry into force of the LMD.

For Bram Vranken, researcher at the Corporate Europe Observatory, “Getting big tech companies to comply with these new rules will be a huge task.”.

Eight years after the data protection law in the EU, “The EU is still fighting for Facebook to respect the privacy of millions of people in Europe”, pointed out the expert.

Difficult application

Meanwhile, EU countries are pushing for the European Commission to focus its resources on achieving compliance with at least nine important laws covering the digital space, created since 2019.

Analysts, meanwhile, urge the EU to be realistic about the resources it will need.

“MEPs are underestimating the challenge of implementing and enforcing the recent raft of digital laws”said Zach Meyers, of the think tank Center for European Reform, in a February report.

The sheer volume of new laws, Meyers argued, “creates the risk that the Commission and national authorities will lack the resources to implement them properly”.

Vestager has already mentioned that the commission is strengthening its ability to monitor noncompliance, but also acknowledges that officials would have to prioritize cases.

The Commission currently has 80 people working on verifying compliance with the LMD, according to a spokesperson for the institution.

Simultaneously, it has 123 full-time employees focused on enforcing the Digital Services Law (LSD), a content moderation law that complements the DML.

Instead, Meta and TikTok admitted in 2023 that they each had more than 1,000 people working on LSD implementation. Google stated that only to comply with the LMD it had working “thousands of engineers”.