David McCabe
The author covers technology policy from the Washington bureau. He reports on how increasingly sceptical regulators are trying to rein in major tech companies and how industry lobbies policymakers.
By Thursday, Google will have changed how it displays certain search results. Microsoft will no longer force Windows customers to use its Bing Internet search tool. And Apple will give iPhone and iPad users access to rival app stores and payment systems for the first time.
The tech giants have been preparing before a Wednesday deadline to comply with a new European Union law intended to increase competition in the digital economy. The law, called the Digital Markets Act, requires the biggest tech companies to overhaul how some of their products work so smaller rivals can gain more access to their users.
Those changes are some of the most visible shifts that Microsoft, Apple, Google, Meta and others are making in response to a wave of new regulations and laws around the world.
In the United States, some of the tech behemoths have said they will abandon practices that are the subject of federal antitrust investigations.
Apple, for one, is making it easier for Android users to interact with its iMessage product, a topic that the Justice Department has been investigating.
“This is a turning point,” said Margrethe Vestager, the European Commission executive vice president in Brussels, who spent much of the past decade battling with tech giants. “Self-regulation is over.”
For decades, Apple, Amazon, Google, Microsoft and Meta barrelled forward with few rules and limits.
As their power, riches and reach grew, a groundswell of regulatory activity, lawmaking and legal cases sprang up against them in Europe, the United States, China, India, Canada, South Korea and Australia.
Now that global tipping point for reining in the largest tech companies has finally tipped.
The companies have been forced to alter the everyday technology they offer, including devices and features of their social media services, which have been especially noticeable to users in Europe. The firms are also making consequential shifts that are less visible, to their business models, deal making and data-sharing practices, for example.
The degree of change is evident at Apple. While the Silicon Valley company once offered its App Store as a unified marketplace around the world, it now has different rules for App Store developers in South Korea, the European Union and the United States because of new laws and court rulings.
The company dropped the proprietary design of an iPhone charger because of another EU law, meaning future iPhones will have a charger that works with non-Apple devices.
The modifications mean that people’s technology experiences will increasingly differ based on where they live. In Europe, Instagram, TikTok and Snapchat users younger than 18 no longer see ads based on their personal data, the result of a 2022 law called the Digital Services Act.
Elsewhere in the world, young people still see such ads on those platforms.
The tech industry is essentially maturing and becoming more like banking, automobiles and health care, with companies tailoring their products and services to local laws and regulations, said Greg Taylor, an Oxford University professor focused on competition in technology markets.
“This represents a sea change in how we regulate the tech sector,” he said. “Although the EU is the first out of the gate, other jurisdictions around the world are trying to do similar things.”
Yet even as the Big Tech firms make changes, smaller rivals like Spotify say much more government action is needed worldwide to seriously address their vast power. Many of the firms continue to report record profits and sales.
Microsoft, Meta, Amazon, Apple and Alphabet, Google’s parent company, have helped push the stock market to new highs. Their combined market value has more than doubled since the end of 2019 to nearly $10.6 trillion.
Even policymakers behind some of the new rules said it was unrealistic to assume the new laws and regulations would immediately dislodge dominant companies like Google or Apple.
Andreas Schwab, a member of the European Parliament who helped write the Digital Markets Act, said the hope was that over time, the rules, if strongly enforced, would provide space for new entrants to emerge and grow.
“The tipping point will be reached when we have more competition and not just a change of some products,” said Schwab, who travelled to Brazil, Japan, South Korea and Singapore over the past year to discuss the European Union’s new tech rules.
“Maybe in one year we say they were important, or maybe in one year we say it’s a joke because the changes didn’t mean anything.” Amazon, Apple, Google, Meta and Microsoft declined interview requests.
Few laws have forced the tech firms to make as many adjustments as the Digital Markets Act.
The EU law was passed in 2022 to bar the biggest tech companies from using their interlocking services and deep pockets to box in users and squash rivals.
The law affects everything from online advertising to messaging apps to app payment methods.
Violators could face penalties of up to 20 per cent of their global revenue.
For more than a year, tech companies have negotiated with EU regulators in Brussels about changes to their products, services and businesses to come into compliance.
In January, Google said it would reduce the visibility of its own services in search results and link more to rivals on queries for things like flights and restaurants.
The company also pledged to let European users limit personal data from being shared across services like search, YouTube and Chrome — a shift long sought by privacy groups.
That month, Apple said in addition to the change allowing rival app stores and payment services, customers in Europe with a new iPhone would see a screen to select a default browser instead of the iPhone’s automatically defaulting to Apple’s browser, Safari.
Around the same time, the Digital Services Act, intended to combat illicit content online, has also begun having an effect. European users have gained new tools to report toxic content.
— The New York Times
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