Friday, August 11, 2023

Unraveling the Digital Markets Act


When Facebook introduced Threads on July 5th, they excluded Europe due to non-compliance with the Digital Markets Act (DMA), an EU regulation effective since May 2, 2023. The question arises: Did the DMA function as intended, or were Europeans penalized by flawed legislation?

To comprehend the DMA’s relevance to us as an independent software company, we read and analyzed it from beginning to end. Our investigation aimed to determine if the criticisms, portraying EU laws as inefficient and uninformed, were justified.


To prevent gatekeepers from unfairly benefitting from their dual role, it is necessary to ensure that they do not use any aggregated or non-aggregated data, which could include anonymised and personal data that is not publicly available to provide similar services to those of their business users. That obligation should apply to the gatekeeper as a whole, including but not limited to its business unit that competes with the business users of a core platform service.


To ensure contestability, the gatekeeper should furthermore allow the third-party software applications or software application stores to prompt the end user to decide whether that service should become the default and enable that change to be carried out easily


The gatekeepers should, therefore, be required to ensure, free of charge, effective interoperability with, and access for the purposes of interoperability to, the same operating system, hardware or software features that are available or used in the provision of its own complementary and supporting services and hardware.


The gatekeeper shall not require end users to use, or business users to use, to offer, or to interoperate with, an identification service, a web browser engine or a payment service, or technical services that support the provision of payment services, such as payment systems for in-app purchases, of that gatekeeper in the context of services provided by the business users using that gatekeeper’s core platform services.


Update (2023-08-15): Jesper:

To the extent that is realistically possible, this is a piece of legislation that plucks the power bestowed upon a few actors from their hands and back into the citizens, the customers, the owners.

The world is complicated and there are a number of points where the law will force one trade-off to turn into another trade-off.


I view this as a cornerstone of civil rights and customer rights in the same vein as the GDPR. The EU does not get everything right and are not the foremost authority on how this all should work. But they are in the same place as the United States Government was before passing the Clean Air Act and Clean Water Act. When the corporations involved have decided that they don’t feel like doing anything, what else is left to do?

Nick Heer:

There remain lingering concerns, like the requirement for interoperability among messaging platforms, which may impact privacy protections. Many E.U. member states have expressed interest in weakening end-to-end encryption. That is not part of this Act but is, I think, contextually relevant.

I am also worried that the tech companies affected by this Act will treat it with contempt and make users’ experiences worse instead of adapting in a favourable way. After GDPR was passed, owners of web properties did their best to avoid compliance. They could choose to collect less information and avoid nagging visitors with repeated confirmation of privacy violations. Instead, cookie consent sheets are simply added to the long list of things users need to deal with[…]

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"Did the DMA function as intended, or were Europeans penalized by flawed legislation?"

Not being able to access yet another dumb toxic system, particularly one owned by Facebook, hardly seems like a penalty. And in the end, not launching in Europe has clearly harmed Threads.

Yep. I can't see how not getting another re-skin of Instagram is supposed to be a negative.

That a big ass monopoly can't use its amassed user data to muscle in on a newly deserted territory is definitely a win though.

John Gruber’s unconsidered, unsupported pro-corporate position on this was off-putting. I typically disagree with his political opinions, but on anti-competitive business practices and consumer privacy protections (except when it’s regarding Apple) he usually assumes inoffensive, widely-held doctrinaire liberal positions.

To see him immediately side with Meta against user protections and pro-competition regulation was surprising. He misattributed the responsibility for the decision to not offer the service in Europe to the EU, and not to Facebook.

No EU regulator barred or punished or sued Meta for launching Threads in the common market. Meta determined not to prioritize complying with EU law. Once they decided not to build a compliant system, they needed to limit the launch to protect shareholders and executives from the risks of non-compliance.

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