AltioTake from 22-23 December: EU Digital Act Proposal Edition
This week, Altio reviews the European Commission's Digital Acts, proposed on 15 December 2020. With inforgraphics about both the Digital Markets Act (DMA) and Digital Services Act (DSA), Altio summarises and analyses the implications of these proposed acts.
DIGITAL MARKETS ACT (DMA)
The Digital Markets Act is designed to "balance the scales" and increase competition by regulating BigTech. By setting up rules and ex-ante prohibitions about how companies interact with users online, the DMA aims to limit scope of gatekeepers (BigTech) and foster this competition.We are all for some good competition, in fact, we think that competition is the key to innovation and disruption. However, without platforms to encourage or display this competition, small and medium-sized companies can’t even begin to compete. For instance, the AppStore definitely isn’t perfect, but just think about all of the companies launched on the platforms. Thomas Boué of the lobbying group BSA, says: “The more rules you have, the more complicated it gets, especially for small- and medium-sized enterprises.” Limiting global interactions with BigTech is detrimental to growth at all levels. While we echo the Commission’s desire to foster competition, Altio doesn’t think that increased regulation with the DMA is the correct route forward.
DIGITAL SERVICES ACT (DSA)
For 20 years, tech regulation was virtually unchanged. Now, the EU’s scramble to have a “digital decade” may be too much, too late. The Digital Services Act is designed to moderate content and data by placing due diligence obligations on digital platforms. Of course we think illegal content should be monitored online, but there’s a difference between monitoring and censorship. The Commission’s DSA suggests something more akin to censorship, something we should be very wary of amongst policy-makers. Altio thinks it’s important to remember that these digital acts are reactionary proposals. In the coming years before passage into law, the document will be pared down to a more palatable form. It's also highly unlikely that noncompliance fines will ever be levied at the 10% rate, acting more as a deterrent, or “nuclear option,” according to Bloomberg’s Alex Webb.