Data&Tech - 18.03.2024


by Luca Ciccarelli, Head of Platform Intarget

Individuals working in the field of Digital Marketing will likely have been struck by announcements and communications regarding the Digital Markets Act (DMA) in their social bubbles over the past few months.
The normal communication flow in these cases dictates that when a new law or regulation comes into effect, businesses should immediately become compliant or risk facing devastating consequences for their own or their clients’ operations.

Interestingly, DMA rules were often perceived as being on par with various compliance solutions proposed by different players in the field – Google Consent Mode, for instance.
We would like to clarify this topic and explain why privacy advancements often present opportunities rather than risks, as is frequently the case.

Let’s start from the beginning.
The Digital Markets Act, enacted by the European Commission in 2022 and implemented in 2023, effectively aims to regulate the digital market within the European Union. It ensures, among other things, free competition, transparency, and the opportunity for new players to enter the market.
Six key players, the “Gatekeepers”, were identified by the Commission in September 2023 as controlling the digital market in Europe for qualitative or quantitative reasons, and are specifically required to comply with the DMA.
The six Gatekeepers are five American companies (Alphabet, Amazon, Apple, Meta, and Microsoft) and one Chinese company (ByteDance, the owner of TikTok).

These six “Gatekeepers” were identified based on two fundamental parameters: they each have an active user base of over 45 million and have recorded revenues of at least 7.5 billion Euros in the last three financial years.

From the point of identification, the Gatekeepers were given roughly six months to comply with the European Commission’s requirements. The deadline was set for March 6, 2024, after which they could face severe sanctions, amounting to up to 10% of their revenue.

The DMA’s first set of demands for the Gatekeepers include:

  • Not insisting on their own payment method as the only one available.
  • Not using personal data collected for one service for another service within the same company.
  • Not pre-installing owned software and browsers on devices or operating systems.
  • Not relying on the aggregate sale of multiple products or services.

For example, the big tech companies will need to avoid abusing their dominant positions by installing their own browsers on their devices (Safari for Apple, Chrome for Android), not sharing data between different services (Meta with Facebook, Instagram, and WhatsApp), and allowing the installation of apps from different stores (Apple with the possibility of using Google’s Play Store).

Let’s now look specifically at the behavior of the 6 gatekeepers and what risks, and more importantly opportunities, lie ahead for those working in the field of Digital Marketing.

Alphabet, the holding company that owns Google and has a vast array of services that need to comply with the DMA (including Google Search, Maps, Shopping, YouTube, Chrome, and the Android operating system), has undergone many significant changes.
Google is no longer permitted to pre-install Chrome as the default browser on Android, nor set Google as the default search engine. It must also display third-party services in search results for flights or hotels and must remove widgets such as those for Google Flight and Maps.
Users can choose which Google services to share their data with (Maps, Search, YouTube, etc.) and can select one, none, or some of these. Google is introducing APIs to allow developers to extract the data collected by various Google services. The Play Store will also enable users to make payments through external third-party services.

These changes have already had a direct impact on Digital Marketing and will continue to do so in the future. Google Marketing Platform and its products (Google Analytics and Google Ads) will need to send signals to Google servers indicating user consent at various levels. Google has introduced a new version of Consent Mode that records user consent to store anonymous data for statistical and advertising purposes, as well as the ability to activate this data for remarketing or customer match activities through the use of encrypted personal data (such as email or phone number).

Redefining the Google search results will have significant impacts on the SERP, with new SEO and SEA optimization opportunities and a chance to redesign the marketing mix between paid and organic search activities.

Apple has always held a unique position in the tech landscape because it simultaneously produces devices, operating systems, browsers, and an application and software store.
The DMA has forced Apple to enable the use of different stores than the App Store on its devices, such as Google’s Play Store, and to let developers distribute updates through marketplaces other than Apple’s. On Apple devices, users will have the ability to use browsers not developed on WebKit (the framework Safari is built on), and will be allowed to set a default browser other than Safari. The NFC system on Apple devices will have to allow the use of payment systems other than Apple Pay.

These changes will allow for app and software developers to break out of the restricted enclosure Apple has imposed until now, and will encourage the development of cross-platform solutions.

The company that controls Facebook, Instagram, and WhatsApp, has always been at the center of many controversies regarding user data usage and especially the cross-usage of this data across various platforms. Until now, users could use the two social networks, Facebook and Instagram, without being able to opt-out of exposure to ads within their newsfeeds. As of March 1, Meta has introduced a version of the two social platforms that is “ads-free” for a monthly subscription of €9.99, asking “free” users to accept the new privacy policy.

From a technological perspective, the most vital update will be the opening of messaging services (Instagram Direct, Messenger, and WhatsApp) to third-party services, allowing third-party advertisers to place their ads within Meta’s messaging products.

The Seattle-based company has long been accused of monopolism, largely due to the extraordinary success of its operating system, Windows, and its Office suite. To comply with the DMA, Microsoft will have to make it easier to use third-party products within its operating systems.
In particular, users will need to be able to uninstall the Edge browser, and on Windows Search, use search engine results other than Bing, like Google Search. This change will allow third parties to develop widgets for Windows.

Microsoft Ads (formerly Bing Ads) did not fall within the scope of the DMA because Microsoft demonstrated that it did not have a dominant position in these services and is essentially a provider like others in this field.

The DMA only identified two aspects of Amazon that need to be regulated in Europe. Users who access Amazon’s marketplace will need to be able to grant or refuse consent for the use of their data for profiling in advertisements shown not only on the eCommerce portal but also on other group services like Prime Video, Alexa, Twitch, IMDb, and Kindle devices.
Advertisers and publishers will have access to more detailed reports enabling them to gain more accurate information about how much is invested in announcements, proceeds gained from impressions on their site, and thus, a more comprehensive understanding of their campaign results.
Clearer methods must be guaranteed for product display management within the marketplace. Amazon will have to avoid promoting its products over third-party products and can’t propose “copied” products from sellers at lower prices.
So, the changes introduced by Amazon will make the advertising market on the largest Western marketplace more transparent and provide advertisers with more tools to monitor and optimize invested budgets.

ByteDance is the only non-American company identified as a Gatekeeper, thanks to the success of TikTok, and it’s the only one to appeal against this decision by the European Commission.
Nevertheless, ByteDance will still have to comply with the DMA. It has already started to make several updates heading in the direction the EU requires. For instance, it has given users the ability to export their data recorded by the platform and has developed APIs to allow developers to export European user data and make it available on other platforms.

Risks and Opportunities
The enactment of the Digital Markets Act will have an impact on six significant tech giants identified as Gatekeepers, but it will undoubtedly bring about consequences for advertisers, publishers, and all companies involved in Digital Marketing activities.

As crises create opportunities, it’s becoming increasingly essential for companies and brands to consult capable advisors that can help them navigate a progressively complex digital market, identify potential issues in a timely manner, and provide effective marketing strategies in an increasingly complex technological and regulatory scenario.

With the right moves and suitable competencies, privacy-related issues could be a significant accelerator for consolidating the relationship between brands and their users, as well as for promoting marketing activities that are both effective and respectful of users’ choices.

The 6 Gatekeeper Announcements:

Google – Un aggiornamento su come ci stiamo preparando al Digital Markets Act

TikTok’s compliance with the Digital Markets Act

About Personal Information Use Across Amazon Services

Microsoft – Previewing changes in Windows to comply with the Digital Markets Act in the European Economic Area

Meta – Offering People More Choice on How They Can Use Our Services in the EU

Apple announces changes to iOS, Safari, and the App Store in the European Union