Soon, Facebook Can Launch a Sideloading App-Install Business. Why The EU’s DSA and DMA Matter.
(This is a preview of a piece I’m working on for Signal360, to be published next week.)
“The US litigates, the EU legislates.” That’s what one confidential source told me when I asked about the Digital Services Act and the Digital Markets Act, the European Union’s twin set of Internet regulations coming into force this year. And indeed, even as the United States government continues an endless parade of lawsuits aimed at big tech, the EU has legislated its way to the front of the line when it comes to impacting how the largest and most powerful companies in technology do business. It may be tempting to dismiss both the DSA and the DMA as limited to only Europe, and impacting only Big Tech, but that would be a mistake. It’s still very early — much of the laws’ impact has yet to play out — but there’s no doubt the new legislation will drive deep changes to markets around the world. And even if you aren’t a digital platform, your own business practices may well be in for meaningful change.
So what do the DSA and DMA do? Both pieces of legislation target “big tech” — most of the targeted companies are in the US — and require them to enact novel forms of accountability for how both consumers and businesses interact with digital services. The DSA, which came into force in August, targets “very large online platforms” with more than 45 million users in the EU — sites like Meta’s Facebook and Instagram, Apple’s App Store, Bing, Google Search, Microsoft’s Bing and LinkedIn, Snap, Twitter, and TikTok. The DSA’s goal is to define online services’ responsibilities related to content moderation, including new rules around use of algorithms and data, user choice, annual audits for compliance, and advertising to minors. In short, the DSA seeks to make the Internet a safer and more transparent place to shop, do business, and be entertained.
The DMA came into effect this past May, and focuses on “unfair” and anti-competitive behavior by the largest companies on the web — what the EU calls “gatekeepers.” These include Amazon, Apple, Google, Microsoft and Meta. Many of the DMA’s provisions address the same behavior that has prompted various US agencies and states to sue — Apple’s refusal to allow competitive app stores, for example…