EU's Digital Markets Act Is Here
The EU's Digital Markets Act (DMA) is set to take effect this week, forcing major tech platforms to open up their ecosystems. The new rules mandate6333296) data portability and open APIs while banning self-preferencing. Some critics argue the law could actually worsen user experience by fragmenting integrated services, but for product managers, regulatory compliance is now a non-negotiable part of the roadmap.
The Digital Markets Act (DMA) entered into force on November 1, 2022, and its rules became applicable on May 2, 2023. The European Commission has designated several "gatekeepers"—Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft, and Booking.com—which had until March 2024 to comply with the new obligations. These companies are now required to ensure their core platform services are open to interoperability with third parties and are prohibited from giving preference to their own products. For consumers, this means they can select alternative app stores, have greater control over their data, and uninstall pre-loaded applications. For instance, Apple now allows EU users to download alternative browser engines not based on its WebKit and has introduced a choice screen for selecting a default browser. Similarly, Google is testing changes to its search results in the EU to give more visibility to rival services for queries related to hotels, flights, and restaurants. The DMA is the centerpiece of the EU's "Path to the Digital Decade" policy program, which aims to create a fairer and more competitive digital market. It complements other regulations like the General Data Protection Regulation (GDPR) and the Digital Services Act (DSA) to establish a comprehensive framework for the digital economy. The legislation was driven by Executive Vice President Margrethe Vestager and Commissioner Thierry Breton as part of the European Commission's digital strategy. Non-compliance with the DMA carries significant financial penalties, with fines of up to 10% of a company's total worldwide annual turnover. For repeated infringements, these fines can increase to 20%. In cases of systematic non-compliance, the European Commission can impose even stricter remedies, such as forcing a company to sell parts of its business. Despite the goal of fostering competition, some gatekeepers have voiced strong opposition. Apple, for example, has argued that the DMA is leading to a worse user experience in the EU by creating security risks and delaying the rollout of new features. The company claims the law forces it to engineer interoperability with non-Apple products, which has slowed down innovation for its European customers.
