Uh oh.. EU targets Big Tech with new antitrust rules 🙈
Friday, 25th March 2022 by Gotrade
It’s the weekend! *Woot woot*
Let’s end off the week by taking a look at what’s making headline news today.
So.. the European Parliament and EU member states have reached a historic deal on the Digital Markets Act (DMA). This means that a set of new rules will be implemented, targeting Big Tech companies.
The DMA will give the Commission authority to carry out investigations and sanction non-compliant behaviour of “Gatekeepers.” They will be able to blacklist certain practices and issue fines for violations. These fines can range anywhere from 10% of a company's annual global turnover to 20% for repeat offenders.
“Gatekeepers” are tech companies with a market capitalization of at least 75 billion euros ($83 billion) or annual revenues within the EU of at least 7.5 billion euros in the past three years. These companies need to have at least 45 million monthly users or 10,000 business users in the EU. Google (GOOG), Microsoft (MSFT), Meta-Facebook (FB), Amazon (AMZN), and Apple (AAPL), and also smaller companies like Booking.com (BKNG) would be affected by these new rules.
Firms that qualify as “Gatekeepers” will be prohibited from giving preference to their own services over others. For example, Google will not be allowed to ask the user if they want to set the Chrome web browser as the default option.
Another key thing to note is that these companies must ensure “interoperability” - the ability for different apps to work with each other. This could mean Apple’s iMessage being forced to exchange data with Meta’s Facebook Messenger or WhatsApp, for example. Uh oh… Companies are not going to like this bit.
The legislation has not passed. A finalized version is yet to be officially adopted by the European Parliament and the 27 countries that make up the EU. If passed, it could be in effect as soon as October. These companies will have 6 months to comply with the new rules.
"The agreement ushers in a new era of tech regulation worldwide. The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies. From now on, they must show that they also allow for fair competition on the internet. The new rules will help enforce that basic principle. Europe is thus ensuring more competition, more innovation and more choice for users” - Andreas Schwab, Parliament’s Internal Market and Consumer Protection Committee.
Why is this important? These new antitrust regulations could reshape the business models of several Big Tech companies drastically. They will be forced to abide by rules, and not abuse their market power.
Big Tech companies will surely not be happy with these new regulations. Here’s what Apple had to say.
“We believe deeply in competition and in creating thriving competitive markets around the world, and we will continue to work with stakeholders throughout Europe in the hopes of mitigating these vulnerabilities.”
Will other countries follow suit and implement similar regulations? Hmmm..
📈 Uber will enlist NYC taxis onto their platform 🚕
Uber (UBER) is facing driver shortages and rising costs. So what are they gonna do about it? Well… They have announced that they will be enlisting NYC taxis onto its app later this spring. This means that New Yorkers will be able to book a cab with their Uber app. Cool!
“Our partnerships with the taxi industry look different around the world and as we look at the next five years, we strongly believe that there is no world in which taxis and Uber exist separately…There is just too much to gain for both sides. Taxis help us unlock new markets. In fact, it’s now our primary product in places like Hong Kong and Turkey” - Conor Ferguson, Uber spokesperson.
Shares of Uber closed at $34.70, up 4.96% for the day.
📈 Apple wants to launch a hardware subscription service 📱
Apple (AAPL) wants to launch a hardware subscription service this year. Hmmm… interesting! How would this subscription service work? Well… Customers would be able to buy an iPhone through monthly payments. This would be a similar model to how users currently subscribe to iCloud.
This would make purchasing an iPhone a lot more affordable to consumers, rather than having to pay a lumpsum fee upfront for it.
According to analysts, implementing this subscription model would boost recurring revenue and could lead to an increase in Apple’s stock price.
Shares of Apple closed at $174.07, up 2.27% for the day.
Top movers & shakers 🎢
What else is making headline news 📰
Cheap Russian oil is heading to China and India amid sweeping sanctions.
BP (BP) establishes a partnership focused on offshore wind in Japan.
China's EV makers could see a 'shake down' as they hike prices on rising material costs.
Google (GOOG) employees bombard execs with questions about pay at a recent all-hands meeting.
Nvidia (NVDA), Intel (INTC) lead rally in chip stocks as optimism on economy boosts riskier assets.
Google (GOOG) Search will soon let you book checkups and other medical appointments.
FAA warns Boeing (BA) may not win certification for 737 MAX 10 by year-end.
Biden seals LNG deal as the EU grapples with an energy crunch.
Google (GOOG)-backed Glance acquires gaming platform Gambit in NFT push.
That’s all from us for now.
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