Finally, it has been found an agreement internal to the EU institutions on the Digital Markets Act (DMA). On March 25th 2022 the EU Council and the Eu Parliament, based on proposal from the EU Commission which dates back to December 2020, reached a provisional political agreement on the Digital Markets Act (DMA).
The Digital Markets Act (DMA) establishes a set of criteria for qualifying a large online platform "gatekeeper". The Digital Markets Act sets out rules defining and prohibiting unfair practices by gatekeepers and providing an enforcement route based on market investigations.
The DMA is based on the assumption that large online platforms act as "gatekeepers" in the digital world. The Digital Markets Act aims to ensure that these platforms behave in a fair way and don't make abuse of its position to the detriment of companies wishing to access such users.
According to the DMA for a platform to qualify as a gatekeeper, firstly it must either have had an annual turnover of at least €7.5 billion within the European Union (EU) in the past three years or have a market valuation of at least €75 billion, and secondly it must have at least 45 million monthly end users and at least 10,000 business users established in the EU.
The platform must also control one or more core platform services in at least three member states. These core platform services include marketplaces and app stores, search engines, social networking, cloud services, advertising services, voice assistants and web browsers.
To ensure that the rules laid down in the regulation are proportionate, SMEs are exempt from being identified as gatekeepers, apart from in exceptional cases. In order to ensure the progressive nature of the obligations, the category of 'emerging gatekeeper' is also provided for; this will enable the Commission to impose certain obligations on companies whose competitive position is proven but not yet sustainable.
Gatekeepers will have to:
- ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription
- for the most important software (e.g. web browsers), not require this software by default upon installation of the operating system
- ensure the interoperability of their instant messaging services' basic functionalities
- allow app developers fair access to the supplementary functionalities of smartphones (e.g. NFC chip)
- give sellers access to their marketing or advertising performance data on the platform
- inform the European Commission of their acquisitions and mergers
Gatekeepers can no longer:
- rank their own products or services higher than those of others (self-preferencing)
- reuse private data collected during a service for the purposes of another service
- establish unfair conditions for business users
- pre-install certain software applications
- require app developers to use certain services (e.g. payment systems or identity providers) in order to be listed in app stores
Consequences against Gatekeeper who does not play by the rules
If a gatekeeper violates the rules laid down in the legislation, it risks a fine of up to 10% of its total worldwide turnover. For a repeat offence, a fine of up to 20% of its worldwide turnover may be imposed. If a gatekeeper systematically fails to comply with the DMA, i.e. it violates the rules at least three times in eight years, the European Commission can open a market investigation and, if necessary, impose behavioural or structural remedies.
To ensure a high degree of harmonisation in the internal market, the European Commission will be the sole enforcer of the regulation. The Commission can decide to engage in regulatory dialogue to make sure gatekeepers have a clear understanding of the rules they have to abide by, and to specify their application where necessary.
Link to the Digital Services Act (DSA)
The co-legislators agreed that, whereas economic concerns deriving from a gatekeeper's data collection will be addressed in the DMA, wider societal concerns should be tackled in the Digital Services Act (DSA). An agreement on the DSA is also expected shortly.
The DSA and the DMA will be the two pillars of digital regulation which respects European values and the European model, and will define a framework adapted to the economic and democratic footprint of digital giants.
The provisional agreement reached on March 25th is subject to approval by the Council and the European Parliament. The regulation must be implemented within six months after its entry into force. On the Council's side, the presidency aims to submit the agreement to the Permanent Representatives Committee (Coreper) for endorsement shortly.
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