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EU’s DMA May Face Challenges With Limited Resources

 |  April 3, 2022

Looming regulations in the EU — specifically through the Digital Markets Act — have raised questions regarding the apparent focus on technology sector giants, known as Big Tech, and the amount of resources the push for closer regulation will entail amidst a struggling global economic recovery..

Critics have raised questions over the (arguably) limited resources that legislators and regulators are bringing to bear against the marquee names in commerce and social media: Amazon, Meta, and perhaps any number of names down the line. Many of these, including Apple and Google’s parent Alphabet, rank among the richest companies of all time, wielding considerable resources with which to push back against laws that affect their business.

The DMA will be implemented beginning in January of 2023 and is focused on the largest of tech platforms, establishing rules that put guardrails around how these companies can act within the competitive sphere. The legislation comes as a response to growing concentration, as well as the rapid evolution of the Digital Economy that has transformed it into one of the main driving forces of global growth.

Among the mandates of the DMA: platforms will be restricted from showing favoritism to their own services on offer to customers or via search engines.  The companies are also banned from using data that is gleaned by activities on their sites to use in their competitive efforts against other firms.

Read More: Big Data Protection: Big Problem?

If the platforms are found in transgression of these and other rules, the fines can be hefty – equivalent to 10% or more of annual global sales. As it stands, most of these companies would likely be in violation of these rules already, with a limited timeframe to correct these issues before the penalties begin to kick in.

According to one study, 67% of the top 1,000 websites in the United States were in violation of the GDPR, the EU’s previous landmark legislation targeting data-gathering and privacy protection practices.

But drilling down into the proposal itself, as had been introduced in December of 2021, we see that a total budgetary allocation, beginning this year and lasting into 2027, of roughly 81 billion euros will be allocated to enforce the Act; after 2027, the number given annually is about 2.7 billion euros.

Let’s examine 2026 and 2027, as noted in the text of the proposal, when the EU member nations will be spending a bit more than 16 billion euros annually.  Now compare Apple’s revenue for that latest year, which stood at about $366 billion for all of fiscal year 2021.

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