As I watch some of the tennis matches between folks here, I wanted to remind myself why regulation can be beneficial.
For the US (I am only passingly familiar with the EU)
1. The U.S. government has set many business regulations in place to protect employees' rights, protect the environment and hold corporations accountable for the amount of power they have in a very business-driven society.
2. Government regulations serve an important role in ensuring a safe, fair economy for small businesses and consumers alike, preventing them from being drained by larger corporations and unfair business tactics.
However I do think the EU has to be extra careful that they do not stifle competition as they are the test case that the rest of the world is watching.
One item on EU Regulations:
Regulations are legal acts that apply automatically and uniformly to all EU countries as soon as they enter into force, without needing to be transposed into national law. They are binding in their entirety on all EU countries.
Based on this, it comes as no surprise to me that Governments are starting to take a stand with regards to corporations like Google and Apple.
JMHO YOMV
One big think is that EU regulations still must be approved by the member states.
Does the us government need the approval of the congress( equivalent to eu parliament) and majority of state governors? To pass a federal legislation?
Eu work like this if I use the USA government bodies as an example:
The executive(EU commission) branch consists of the President, his or her advisors and various departments and agencies would propose a legislation.
The senate?(council of EU) would also have the head of agriculture, economics etc etc from every state form the goals of the of the executive (eu commission)
The us House of Representatives(eu parliament) would be the legislative body would negotiate the proposed law/regulation etc and vote on it. They can’t initiate legislative action.
The Us senate(eu council) would contain one senate governer from every state. They would negotiate with the House of Representatives and vote on the proposed legislation.
If both the senate(EU council) and House of Representatives(EU parliament) agree of the structure and goal of the bill, the executive will provide it for a vote. This means the house and the senate always votes on the same bill.
They don't. They threaten to do it because lawmakers are trying to manipulate them into making their platform worse, and then those 800 million people convince their lawmakers to stop this nonsense rather than lose access to iPhones/features.
The "choice" that these people want already exists with Android phones, they just want to buy a non-crappy iPhone and then do whatever they want with it. But having a more cultivated ecosystem is part of what makes an iPhone non-crappy, and the vast vast majority of Apple's customers like it that way. 800 million people shouldn't have worse phones because a tiny minority of loud people and dumb lawmakers think that the iPhone should be more like Android.
Do you have any source for any of that or is it just a feeling you have?
At one time features were the primary differentiators but as user expectations have evolved almost all messengers implement the same core features, albeit in different user interfaces. If WhatsApp were to become interoperable with iMessage, I'd ditch the WhatsApp client and use the iMessage client to reach my WhatsApp contacts mainly because there is no WhatApp client on my iPad and it's my preferred device. If Viber and WhatApp became interoperable I'd ditch the Viber App and all of their annoying ads and commercial sticker packs. It would probably put a serious dent in their monetization model if a lot of people did the same. Almost all of the monetization models of the different messaging services are implemented through the client apps. E.g. Advertising, tracking, subscriptions for group content access, stickers packs, etc... If I could have access to all these communities through a clean unencumbered and relatively private and tracking-free interface like iMessage, I would do it in a heartbeat. That is good for me as a user, but really bad for these services that want to stay in businesses.
I would immediately use Signal instead of WhatsApp or iMessage as it’s both private and exist on iPhone, iPad and windows that I use. Because it sounds like the core economic model they have is trap as many users as possible and make money of them instead of making the best product.
So make it better for users and companies will have to innovate or make it worse for users so companies don’t need to innovate. Just as how IE died for failing to innovate but tried to trap as many users as possible to stay relevant.
They would become the Facebook of 2013-2014 which was was stock-rich but operating on very slim profit margins. A Facebook mostly leveraging their stock value for acquisitions and revenue acquisition. Amazon was not profitable at all when they reached gatekeeper status. Neither was Snapchat based on user count and valuation, but I can't remember if they are considered an important enough market for the DMA to apply to them... kidding.
Weill it’s al based on their impact on the market. If Amazon isn’t profitable and is harming the market, then they will just be limited in the actions they can continue to use. Same with Facebook who will be seen as a digital public square and face new obligations.
It mostly depends on the business model and the company's growth plan but its very easy to have a $30-100 valuation per active user during the growth state where a company could foreseeable reach the active user and global market cap threshold and yet be still hemorrhaging cash with an un-solidified and unproven business model now encumbered by a new set of regulations.
There are a lot companies like Telegram that exceed the EU active user criteria and are well over the halfway mark in global valuation, but have no revenue. Telegram isn't even planning to start booking revenue until next year. But an influx of users paired with irrationally exuberant investors could easily bring them over the gatekeeper line without them having to do anything.
That’s is why every criterias must be met. Telegram probably can’t ever fulfill four of the six criterias even if they tried
Even if Telegram doesn't make gateway status on its own, it's hard to imagine any company that would be in a position to buy them that wasn't already a gateway or wouldn't become a gateway soon after closing the deal.
While I guess it is possible that a random rich dude or company in an unregulated industry could buy one of these tech companies it rarely happens and when it does happen it's a fire sales that nets investors far less than the premium they would get from an in-industry merger.
The thing is telegram can’t become a gatekeeper. But if another company buys them, they could depending on the company. And remember EU do not want a company to be bought up as it’s negative for the internal market, consumers and for healthy competition. Buying your competition isn’t desirable for anyone but the investors.
The reality is that most businesses fail. Seasoned investors want to see they have as many opportunities to recoup something when that happens. The prevailing idea is you place and many reasonable bets as you can and mitigate as many risks as you can so the wins will outpace the losses. When you reduce the options for mitigating losses you change the dynamic of the investors' winning formula and they place less bets on things that have fewer exit strategies. Nobody wants to sell their company, but having that option is sometimes the difference between getting the startup capital you need or not.
One interesting curiosity is that venture capital investment is rare in EU, mostly it’s bank loans or investment from bank institutions. 80 billion in first quarter in USA compared to barely 20 billion in the first quarter in EU was venture capitalists investments.
then again do you want to encourage startups to have the goal to be purchased and erased from the market as fake businesses or encourage startups that plans to exist as a real business?