Europe reached a key milestone in the renegotiation of its rules for governing big tech late Thursday, when it announced a deal on the upcoming Digital Markets Act. The legislation amounts to an overhaul of antitrust rules in Europe, and will provide scope for the EU to flex its muscles when reining in the power of tech giants.

The foremost example of this is in the legislation’s approach to messaging apps. The DMA lays out the demand for companies with messaging apps to make them interoperable. This will extend to the biggest messaging apps in the world, Meta’s WhatsApp and Facebook Messenger, and Apple’s iMessage. Meta and Apple will be obliged to ensure people using these services can exchange messages, photos and videos with people using smaller services.

This could pose a complex tech challenge for these companies, but they have a strong incentive to comply. If they break Europe’s new rules, they could be hit with fines of up to 10% of their global annual revenue, jumping to 20% for repeated infringements. The size of the fines reflects the fact that the EU is “serious about this common endeavour,” said Commissioner for the Internal Market Thierry Breton in a statement.

The aim of the Digital Markets Act is to ensure an equal and level playing field among tech companies who want to compete in the EU in order to ensure that European citizens have the benefit of choice. “What we want is simple: Fair markets also in digital,” said European Competition Commissioner Margethe Vestager in a statement. “We are now taking a huge step forward to get there — that markets are fair, open and contestable.”

But the impact of the legislation will extend far beyond benefitting European consumers and smaller tech businesses operating in the region. As countries around the world, including the US, continue their own efforts to regulate big tech, Europe’s early intervention creates a model for others to either follow or reject.

Of particular interest to lawmakers in the US will be how the DMA regulates “gatekeepers” — a term used to describe the biggest and most powerful technology companies. While the DMA sets the rules for all tech companies competing in the EU to follow, gatekeeper companies must follow additional rules, as they are “most prone to unfair business practices,” according to an EU press release.

The DMA sets out a definition of gatekeepers as companies with a market capitalisation of at least 75 billion euro or an annual turnover of 7.5 billion euros, and additionally must provide certain services such as browsers, messengers or social media, which have at least 45 million monthly end users in the EU and 10 000 annual business users. This extends to companies largely based in the US, including Apple, Meta, Amazon and Google.

Some of the obligations of gatekeepers include:

• Allowing services provided by third parties (messaging apps, for example) to interoperate with their own
• Not blocking users from un-installing any pre-installed software or apps
• Not restricting their users from accessing services that they may have acquired outside of the gatekeeper platform
• Providing companies advertising on their platforms access to performance measuring tools
• Providing their business users with access to the data generated by their activities

“The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies,” said Andreas Schwab, the rapporteur from Parliament’s Internal Market and Consumer Protection Committee in a statement. “From now on, they must show that they also allow for fair competition on the internet.”

Thursday’s agreement is an important milestone, but the legislation still needs to be passed. Agreeing legislation in Europe is a complex and time-consuming process, as it must be agreed upon by the executive branch of government, the European Commission, the Council, which consists of representatives from member states, and the European Parliament, which is made up of elected representatives from across the bloc.

Once it’s been approved by the Council and the Parliament, the Commission expects it to come into effect around October. Companies running complex messaging apps are likely to be given a grace period to ensure their interoperability.

In the meantime, tech giants will also be anticipating an agreement on the sister legislation to the Digital Markets Act, the Digital Services Act. This specifically deals with the regulation of content, including disinformation and advertising. Once again, they’ll be waiting with bated breath to see what rules they’ll have to abide by to continue operating in Europe, and what the potential penalties could be for failing to comply.

Meta and Apple did not immediately respond to a request for comment.