Tech companies that violate our privacy put companies that do play by the rules at a disadvantage. This has been ruled by the European Court of Justice. Therefore, from now on, privacy violations may also be tackled by a competition watchdog. And that could earn tech companies hefty fines.
The ruling by the European Court of Justice gives Europe much more clout to tackle privacy violations. The problem now is that privacy regulators often lack the manpower to tackle privacy violations.
Tech companies make a lot of money from personalised ads. By violating our privacy, these companies can collect a lot of information about us. With this, more accurate ad profiles can be compiled, generating higher ad revenue.
Companies that do play by the rules and do not violate our privacy may make less money from ads. This is because the ad profiles in that case are less accurate. In such a situation, these companies are put at a disadvantage by parties that do not take our privacy so closely.
Thanks to this ruling, tech companies that violate our privacy can be tackled not only by a privacy watchdog, but also by a competition watchdogs.
Seven major tech companies, including Apple and Amazon, have registered with the European Commission due to a new tech law. With services that we can hardly do without, these companies have a gatekeeper role. Stricter competition rules will soon apply to such companies.
All internet platforms with at least 45 million monthly active users in Europe and a market value of at least 75 billion euros were required to register with the European Commission. Seven major tech companies have done so, according to Commissioner Thierry Breton on Twitter.
The seven companies are Google parent company Alphabet, e-commerce giant Amazon, iPhone producer Apple, and TikTok parent company ByteDance. Facebook parent company Meta, software giant Microsoft, and electronics manufacturer Samsung have also registered with the Commission.
These large tech companies may soon be subject to the Digital Markets Act (DMA). This is a law with stricter regulations for companies with products or services that we heavily rely on. The DMA aims to ensure fair competition and better protect users.
The European Commission will decide by September 6th which companies will fall under the DMA. This can also include companies that have not yet registered with the Commission.
Sending Messages from WhatsApp to Signal
Part of the legislation is that companies, for example, must open up chat services so that users of different services can communicate with each other. This means that, for example, WhatsApp users should be able to chat with Signal users and vice versa.
Another rule of the DMA is that users should be able to uninstall all pre-installed apps on their phones. Until now, manufacturers have provided their phones with a number of their own services or apps with which they have partnerships.
In addition, companies are not allowed to favor their own services. For example, Google is not allowed to set its Chrome browser as the default for users.
Better protection of our privacy
The DMA also aims to better protect users’ privacy. For example, companies that collect personal data across different platforms can only combine that data if the user gives permission. Think, for example, of data that Instagram can share with Facebook because both companies belong to Meta.
Furthermore, under the new rules, tech platforms are no longer allowed to require developers to use certain services in order to be listed in an app store. This includes payment services, among others. Currently, many payments go through Apple or Google services when users download apps from their stores. In the future, customers should also be able to pay directly to developers.
High fines and other penalties
If a company fails to comply with the rules, it can expect a fine of up to 10 percent of its global revenue. If a company repeatedly violates the rules, the fine can increase to 20 percent of its revenue.
If a company consistently fails to comply with the DMA or violates the rules at least three times within eight years, the European Commission can initiate a market investigation. The Commission can then impose severe penalties, such as the breakup of a company.
