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EU says Digital Markets Act applies to six tech giants, largely US

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The EU has identified six tech giants whose market power it hopes to reduce by applying proactive, pro-competition rules on how they can operate core platform services. Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft are the “gatekeepers”.

The Digital Markets Act has designated 22 core platform services operated by the six gatekeepers, according to the Commission.

The full breakdown: Four social networks (TikTok, Facebook, Instagram, LinkedIn); six “intermediation” services (Google Maps, Google Play, Google Shopping, Amazon Marketplace, iOS App Store, Meta Marketplace); three ADS (Google, Amazon, Meta); two browsers (Chrome, Safari); three operating systems (Google Android, iOS, Windows PC OS); two N-IICS (WhatsApp, Facebook Messenger); one search engine (Google); and one video site

The DMA takes a proactive approach to competition concern once market power is reached, including giants with 45 million+ active local users. A turnover of €7.5BN+ in the last three financial years and a market capitalization of €75BN are other gatekeeper criteria, but the Commission has some discretion to target platforms that are expected to become “entrenched and durable” in the “near future”.

The regulation took effect in May after EU lawmakers finalized the details earlier this year. That agreement followed lengthy negotiations between the European Parliament and Council on the Commission’s late 2020 digital competition reform proposal.

Alphabet/Google, Apple, Amazon, ByeDance/TikTok, Meta/Facebook, Microsoft, and Samsung expected to be subject to the regime. ByteDance, TikTok’s parent company, is the only non-US tech giant on today’s list. Samsung isn’t.

Gmail and Outlook.com, two other surprising omissions, are not core platform services.

The EU wrote that Alphabet, Microsoft, and Samsung provided sufficiently justified arguments that Gmail, Outlook.com, and Samsung Internet Browser do not qualify as gateways for the respective core platform services, despite meeting the DMA thresholds. Thus, the Commission did not designate Gmail, Outlook.com, or Samsung Internet Browser core platform services. It follows that Samsung is not a gatekeeper for any core platform service.”

In a speech at a digital conference in Estonia yesterday, EU internal market commissioner Thierry Breton summarized the regulation’s goals. We know that some tech giants have used their market power to give their products and services an unfair advantage and prevent competitors from doing business and creating value and jobs. These practices distort competition, undermine consumer choice, and limit SMEs’ Web 4.0 and virtual world innovation potential, he said.

It was time for Europe to set its rules of the game upfront, providing a clear enforceable legal framework to foster innovation, competitiveness, and Single Market resilience instead of lengthy and ineffective antitrust investigations. The DMA does that.”

In core platform services, the DMA prohibits self-preferencing or gatekeepers from forcing business users to use their own services and gatekeeping app stores from preventing rival stores from being installed. Gatekeepers must share platform usage data with business users and cannot prevent them from promoting competing services.

There are also data portability and service interoperability requirements, including messaging giant interoperability and OS, browser, search engine, and virtual assistant choice screen obligations. Gatekeepers cannot track and profile users for ad targeting without consent, stop users from uninstalling gatekeeper preloads, and apply FRAND terms for general access (and avoid discriminatory T&Cs) for fair dealing with business users.

The regime can cost up to 10% of global annual turnover or 20% for repeat offenses.

The Commission can also require gatekeepers to sell their businesses or parts of them or bar them from buying “systemic non-compliance” services. The EU’s competition division, which has been investigating Google’s adtech business since 2021, warned this summer that breaking Google up would be the only effective solution if its concerns are confirmed.

The new rules are expected to increase competition on major platforms from independent app stores, alternative payment services, and upstart search engines while cracking down on gatekeeper abuse like arbitrary T&C enforcement.

Payment unicorn Paddle welcomed the official gatekeeper designation early. CEO Jimmy Fitzgerald called today’s announcement “a step towards fair competition, increased consumer choice, and true business innovation.” He added that asking large industry players to introduce third-party app stores and payments systems without the ‘self-preference’ of their own products will benefit software developers by allowing them to choose where and how to sell their products without losing a percentage on every sale.

Since consumers should have more freedom to escape platform giants’ lock-ins, the new regime may encourage less exploitative business models. How well the pan-EU regime will rebalance a digital playing field that Big Tech still dominates and has defined and configured for decades is unknown.

Since consumers will likely continue to trust the biggest brands for a while, diluting powerful network effects may take time. Innovative and determined startups should have better odds than ever at breaking GAFAM’s tech user grip. Or so the new disruptive regulated reality is for EU service entrepreneurs.

There is also time before the bulk of the DMA compliance deadline: The EU vs. Big Tech reckoning begins in early March 2024, when designated gatekeepers have six months to meet legal requirements. The Commission notes that designation requires notification of any “intended concentration” (M&A).

For designated companies to ensure and demonstrate effective compliance. They have six months to submit a detailed compliance report detailing how they comply with each DMA obligation, it added.

The EU’s executive must prepare to take on such a massive extra oversight role quickly since the Commission is the sole DMA enforcer.

Naturally, the bloc’s competition unit has ruled tech giants for years. Among them, major Google enforcements and investigations into Apple, Amazon, Meta, and Microsoft. However, the DMA goes beyond ex post antitrust investigation and enforcement to include ex ante surveillance and preventative measures. EU regulators must also advance several gears. The DMA may reduce the EU’s (classic) competition investigations on Big Tech if it successfully curbs a wide range of unfair tactics.

However, early signs suggest gatekeepers may not quietly accept the EU’s new playbook. As the new rules take effect, formal challenges are likely.

The FT reported yesterday that Apple and Microsoft were challenging the Commission’s designation of iMessage and Bing as core platform services under the DMA, arguing that the services are not popular enough. Bing has a 3% regional marketshare as Google dominates Europe. According to the FT, Apple claimed iMessage does not meet the 45M+ user threshold to be a core platform service and must interoperate with rival messaging services. The newspaper reported that the Commission was still considering Bing and iMessage.

Since Bing and iMessage are not on the initial list of 22 core platform services, the EU appears to be cautious about this early pushback. Instead, the Commission will examine Apple and Microsoft’s claims to exclude these services.

The Commission opened four market investigations to “further assess” Microsoft and Apple’s claims that Bing, Edge, and Microsoft Advertising are not “gateways” despite meeting DMA thresholds.

Under the DMA, these investigations determine if a company’s rebuttal proves services shouldn’t be designated. The investigation should take no more than five months, the Commission said.

Apple has avoided an interoperability obligation the DMA applies to designated messaging platforms by not including iMessage. This could have forced WhatsApp and Messenger users to send messages to iMessage users.

Microsoft warned that forcing Bing to comply with the DMA and show choice screens to users could paradoxically increase Regional share for Google’s massively dominant search engine.

Tech giants used to setting their own rules and terms of service may file formal legal challenges to test the EU’s countervailing rule-making after this early push back on designations.

Miranda Cole, antitrust and competition partner at Norton Rose Fulbright, said: “The gatekeepers’ identities aren’t a surprise, but it’s about to get interesting in terms of who appeals the designations, who requests Article 10 exemptions, and the results of the Article 16 market investigations opened today.

The exemptions and preliminary findings from the market investigations will be crucial because the DMA’s quantitative thresholds don’t account for market presence through usage frequency, etc. The European Commission opened market investigations into Microsoft’s Bing, Edge, and online advertising services today, which have de minimis market shares under 5%, suggesting it is aware of this issue. The designations today are just ‘starters for ten’.”

The bloc can also add gatekeepers as market conditions change. In the coming months and years, more tech giants and platform services may join the list. Every three years, the Commission must review existing designations to ensure platforms qualify.

Some of the gatekeepers designated today have previously been designated as VLOPs or VLOSE under the Digital Services Act, the DMA’s sister regulation (and the DSA’s compliance deadline for larger platforms was late last month). In-house policy teams at the world’s most valuable tech companies are busy.

 

As Editor here at GeekReply, I'm a big fan of all things Geeky. Most of my contributions to the site are technology related, but I'm also a big fan of video games. My genres of choice include RPGs, MMOs, Grand Strategy, and Simulation. If I'm not chasing after the latest gear on my MMO of choice, I'm here at GeekReply reporting on the latest in Geek culture.

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The cast of the Sonic the Hedgehog 3 film has added an exciting new addition with the inclusion of Shadow, who will be voiced by the talented Keanu Reeves

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After a long wait, it appears that the search for a capable Hollywood actor to bring the brooding Shadow the Hedgehog to life has come to an end. Keanu Reeves, a renowned actor known for his iconic roles in film franchises such as The Matrix and John Wick, as well as his involvement in the highly anticipated game Cyberpunk 2077, has officially been cast for the role.

Speculation has been running wild lately, but The Hollywood Reporter has officially confirmed the casting, citing reliable sources in the know. News of Sonic the Hedgehog 3 being showcased at Cinemacon has quickly spread. Reeves is sure to bring his own special touch to the role, but it’s uncertain how well he will mesh with the mustachioed Dr. Robotnik, as Jim Carrey is set to reprise the character.

What are your thoughts on Keanu Reeves being cast as Shadow the Hedgehog in Sonic the Hedgehog 3? Please avoid sharing fan art in the comments section below.

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Get ready for a metaphorical rollercoaster ride with ReFantazio Livestreams!

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ATLUS has just announced their latest event, the “ATLUS Exclusive: Metaphor: ReFantazio” broadcast. Fans can look forward to an exciting 30-minute showcase of never-before-seen gameplay from the publisher/developer. How exciting is that to anticipate?

According to Gematsu, director Katsura Hashino will serve as the host of the broadcast, which will debut on YouTube on April 22. The English version will include dubbed audio and English subtitles, and we have also expanded the list of timezones available.

  • North America: 3 pm PDT, 4 pm MDT, 5 pm CDT, and 6 pm EDT.
  • UK/Ire: 11pm BST
  • Europe: 12am CEST / 1am EEST
  • Asia/Oceania: 7am JST, 6am AWST, 8am AEST.

Additionally, there is a scheduled stream for the next day, April 23rd, with the specific times listed below. Get ready for the “ATLUS Exclusive Debut Commemoration Special—Metaphor: Stalkers Club Final,” where fans can indulge in the captivating presence of hosts Mafia Kajita and Tomomi Isomura. They will thoroughly analyze and delve into all the information disclosed during the initial broadcast. Sayawaka, a visitor who is the author of the associated manga’s story, will be with them.

  • North America: 7 am PDT, 8 am MDT, 9 am CDT, and 10 am EDT.
  • UK/Ire: 3pm BST
  • Europe: 4pm CEST / 5pm EEST
  • Asia/Oceania: 11pm JST, 10pm AWST, 1am AEDT

What are your thoughts on the influx of information about Metaphor: ReFantazio? Are you planning to watch any of the upcoming broadcasts? Share your authentic thoughts in the comments section below.

 

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Final Fantasy 7 Rebirth’s Retry Wording Has Been Updated in a Subtle Manner

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Despite the numerous praises players have showered upon Final Fantasy 7 Rebirth, there is one particular aspect of the game that has garnered nothing but criticism: the perplexing wording of its retry screen, which players encounter when facing a Game Over. Fortunately, the developers have discreetly resolved this issue in the game’s latest patch. They have fixed the Platinum Trophy progression, resulting in a slightly less confusing experience for players.

If you don’t possess exceptional combat abilities, chances are you’ve come across the game’s notorious four options: “Retry from Current Battle, Retry from This Battle, Retry from Before Battle, or Resume.”. As an avid gamer, I must admit that I’ve experienced the frustration of losing precious time due to my own foolish mistake. In this particular instance, I found myself engrossed in fine-tuning my matrix and equipping my party, only to have it all go to waste when I encountered a formidable enemy. To compound my error, I made the ill-advised decision to retry the battle, resulting in an hour of agonizing repetition. Lesson learned!

The “Retry from This Battle” option has become a source of frustration for players who are struggling with the game’s final boss encounter, leading to a significant number of rage-quits. Without giving away any surprises, opting for that choice after being defeated would result in players being sent back to the beginning of the final boss encounter, needlessly forcing them to forfeit approximately an hour’s worth of hard-earned progress in battle.

After the update, players now have the option to select “Retry from the Current Phase” instead of “Retry from Before the Current Battle.”. It’s worth noting that this change is only slightly improved. It’s rather disappointing that the screen is overly convoluted, which may lead to players feeling frustrated. While it’s better late than never, we can’t help but wonder if this issue will persist in the future.

 

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