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New EU laws aim to rein in Apple, Amazon, and other Big Tech companies

Yahoo Finance legal reporter Alexis Keenan details the EU's recent Digital Markets and Digital Services Acts to regulate product favoritism and content moderation from tech companies.

Video transcript

JARED BLIKRE: Welcome back. Lawmakers in the European Union approved two new laws regulating tech giants like Amazon and Microsoft. Joining us with more on this is Yahoo Finance's Alexis Keenan. And Alexis, I got to tell you, when I hear European, new law, regulating tech, I'm thinking compliance costs through the roof.

ALEXIS KEENAN: Maybe. Maybe. It depends. There's some skeptics who think that there's not really a great regime in place to regulate these folks. But there could be in time. But here's what these laws do. One is called the Digital Markets Act, and it is aimed at competition. It wants big tech. It's specifically aimed at big tech, right? This is not anti-competition law for the smaller players. This is going at the Amazons, the Apples, the Metas, the Microsofts.

What it does is it requires competition to be spread out in a few ways. One is that it requires interoperability in messaging services. So you want to think of things like WhatsApp and Signal. You'll be able to message between those services, those apps. Another way is by stopping companies from favoring their own products and services. And that's been a huge one here in the US. You can't have Amazon saying, buy our products first.

JARED BLIKRE: Bundles. Those bundles.

ALEXIS KEENAN: Right, so their competitors are going to have to be true competitors after this. Next is it's stopping the big tech companies from preventing users from removing preinstalled software and apps. So that one is a particular hit for Google and Apple that, of course, we come with our Android and iPhones with all those pre-installed functions that they like us to use and push us towards. So big changes in Europe. And we'll have to see how all of this plays out.

The second one is called the Digital Services Act. And that one is about corporate transparency, and it's also about updating and streamlining Europe's liability rules for third party content. What we have here in the United States, similar, Section 230. That regulates and gives these platforms the ability to moderate content.

So it's similar to that. It's not quite the same, but it absolutely singles out big tech, whereas here, in the US, we are on a more level playing field. And we treat all of those digital players the same way. But it is going to require companies to be much more transparent about how they're handling and managing the risk of the content that's on their platforms.

RACHELLE AKUFFO: And Alexis, following up on that, those same lawmakers also considering easing IPO rules in the EU with the hopes of attracting more tech startups. What can you tell us about that?

ALEXIS KEENAN: Yeah, Rachelle, so this is called the EU Listing Act. And what it does is it aims to overhaul the way that IPOs work in the EU. The listing requirements, they want to relax those. And the goal is to attract SMEs, specifically deep tech startups, to the EU's capital markets. And in turn, they hope that that will also attract institutional investors and even get companies to move their headquarters to Europe.

The European Commission has said that they are far behind in attracting this type of company talent. They want to have deep tech going on in Europe in a much bigger way. They also want to allow founders of these companies to retain control over their companies post-IPO.

Another concern is that these SMEs don't have access to capital markets in Europe, that they are mostly relegated to having to use traditional bank financing. So they really want to change that. And I guess, perhaps we'll see-- hopefully, the European Commission hopes that there will be more Silicon Valley's of the EU.

JARED BLIKRE: Yeah, it looks like the US IPO market could use a little help this year as well. Thank you for that report here. Yahoo Finance's Alexis Keenan.

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