On October 12, 2022, the Digital Markets Act (DMA) has been published in the Official Journal of the European Union. The DMA came into effect on November 1st, 2022 and will start applying six months after its entry into force, i.e. on 2 May 2023. The DMA introduces a variety of per se prohibitions and obligations on "big tech" in order to address concerns about "contestability" and "fairness" in the digital economy. Competition cases served as inspiration for the rules. The European Commission will designate some suppliers of "key platform services" that meet a number of requirements as "gatekeepers" under the DMA. The designated "gatekeepers" will have six months to begin complying to the DMA requirements after being specifically identified. While the scope and effects of this law are open to debate, it seems inevitable that it will affect major enterprises. In this article, we will examine all these topics about the DMA in detail.

The world we live in is in a constant state of development and transformation. Our developing and advancing world has continued by experiencing a process with different tools in every period. This movement, which continued with agriculture in the first periods and then with industry, continues with technological developments. Technological developments push all this progress to be very, very fast, and in addition, it always provides this with innovative ideas. Indeed, the underlying issue has made the importance and place of the concept of innovation completely different. 1(Bellamy & Child, 2001)

On the other hand, innovation markets are defined as technology-containing markets such as software, the internet, and informatics, and they are called "new economy" in doctrine. In this regard, Posner says that the main features of these markets showed that they differed markedly from old economy models because of rapid technology change, the creation of intellectual property rights, additional products that work together, and high-level technology. 2(Posner, 2000).

Like technology, the law has a dynamic structure that lives, changes, and develops. All these necessitate the law and legislation to be compatible with today's terms and conditions. As a branch of law, competition law aims to protect the free market economy and regulate companies' anti-competitive manner. Competition law starts with defining the relevant market. After defining relevant markets correctly, according to EU regulations, it can assess the presence/absence of infringement against Articles 101 and 102.

Although defining a relevant market may be easy for the traditional sectors, defining the relevant market in the tech sectors is not easy since innovations emerge in these fields regularly and quickly. Thus, we will be trying to discuss and inform Digital Markets Act ("DMA") in this paper.

The place of the digital world in our lives is well-known. Therefore, traditional industries are characterized by stable markets, heavy capital investment, low rate of innovation. In contrast, the new economy is characterized by falling average costs, moderate capital requirements, and high innovation. It can be said that the high technology sectors are shaped around the rapid change of innovations (innovation), the importance of intellectual property, aggressive competition, and low prices. This situation also affects the following:

Companies do not compete with money because of all these new economic models, technological developments, and innovations. In addition, within the framework of the new economy model, the following cannot be overlooked in these sectors, which are innovation-oriented and have rapid entry and exit: the speed, continuous and sudden change in innovative developments have significant differences and importance in terms of the definition of the market and the applicability (obsolete) of the regulations. Moreover, the most severe issue and necessity are that these companies in tech sectors have the dominant position in the market, which has caused the Digital Markets Act.

The companies occupying the digital market in today's world are apparent. The innovative power these companies have brings together many other powers such as capital and reveals structures that always remain monopolies and at the top. This situation causes the emergence of a dominant position and possible infringement.

On the other side of the coin, Schumpeter argued that large-scale, monopolistic profit-making firms are more innovative for our world that aims to progress, or this power pushes them. This is because the size or monopoly facilitates portability with the power owned. On the other hand, This issue is a disadvantage for these companies because rapid innovations in the innovation markets will not be able to maintain its position in the market if the dominant player does not make the necessary innovations. The dominant position in the innovation markets can change at any time and frequently.

These issues are sometimes not enough in the digital world, especially in examining gatekeepers defined by Digital Markets Act. Because these areas where innovation competition is in, not price competition and existence with innovation reveals the situation of being the first. Being the first also creates a natural dominant position and monopolization. All these gatekeepers within the scope of the new economy model also have severe capital power in their hands. The second source of the relationship between innovation and monopoly power is keeping monopoly power. The company, which gained monopoly power with its previous product, can expand by developing a new product. Alternatively, it can strengthen its power by developing differentiated products or establishing dominance over distribution channels. Differentiation of the product is crucial as it will prevent other products from being considered close substitutes. Due to the advantages of monopoly power, the firm will have the ability to respond much more quickly to the innovations of its competitors. Knowing that the firm will respond immediately will also reduce competitors' desire to develop new products. Since the monopoly firm will make excessive profits, it will be able to better finance research and development and have the opportunity to employ the most talented and innovative people in the market 3(Kamien & Schwartz 1982, 29).

Digital markets, innovative markets, naturally create a situation where substitutability approaches zero with their power. In particular, gatekeepers do not allow any other idea to share the innovation by entering the market. The ability to employ more talented and innovative people, and the power to provide research and development more efficiently and with large numbers, perpetuates this dominant position. For this reason, it naturally has a monopolistic position, and since this will allow it to generate excessive profits, this profit will make it easier to work on R&D. It almost is a cycle within itself. In addition, it also ensures that the products they produce with the economic power they have with this company are connected. For example, although Microsoft is an operating system, it also directly supplies many products such as music players. The Commission alleges that Microsoft unlawfully linked two products by integrating Windows Media Player with the Windows user operating system. The Commission argues that Microsoft's linking of Media Player with Windows restricts competition for alternative media providers:

The SSNIP test used in substitutability does not work in innovative markets for two main reasons: First, performance competition is more important than price competition in innovative markets. The second is that the SSNIP test is static. As technology evolves rapidly, the price/performance ratio changes rapidly. 4(Pleatsikas and Teece 2001, 671)

As part of its Strategy of Shaping Europe's Digital Future, the Commission aims to provide a fair and competitive digital environment, where the fundamental rights of digital service users are protected, and new entries into the digital market are possible. With the Digital Markets Act, Commission aims to (i) harmonize legislation, (ii) provide a fair and (iii) contestable environment in the European Union digital market. (The Digital Markets Act article 1.1)

Gatekeepers: Firms with significant market power participating in key digital industries are designated by the DMA as companies with substantial market power (e.g., online marketplaces, search engines, social networks, video-sharing platform services, communication services, and others who have substantial market presence in the EU).

Obligations: Gatekeepers would be subject to a range of duties pertaining to their interactions with both "business users" (e.g., enterprises that utilise the gatekeeper's platforms) and "end users" (the gatekeeper's and/or its business users' direct clients). These responsibilities are divided into two categories:

Obligations for self-execution: Article 5 of the DMA outlines responsibilities that gatekeepers must meet in order to comply with their basic business operations (e.g., how they contract with business users and end users). Gatekeepers are prohibited from mixing personal data from their core platform services with data from other sources (including data from other gatekeeper services), and gatekeepers are prohibited from enforcing most-favored-nation agreements.

Obligations on gatekeepers that are " susceptible of being further specified": these requirements primarily concern a gatekeeper's infrastructure management, notably in terms of data availability and interoperability. For example, Article 6 states that a gatekeeper shall allow broad system compatibility for its business users. A gatekeeper, for example, must provide business users with effective, high-quality, continuous, and real-time access and use of aggregated or non-aggregated data that is supplied for or created via the usage of the gatekeeper's relevant core platform, free of charge. Furthermore, the Commission has the authority to direct commercial actions that it thinks required for a certain gatekeeper.

The Commission's Powers: The DMA gives the Commission broad investigative powers to establish gatekeeper designation and whether a designated gatekeeper meets its requirements. In addition, the DMA provides the Commission with the following powers:

Financing capabilities of up to 10% of a company's annual worldwide revenue, as well as recurring penalty payments of up to 5% of the company's annual global turnover;

  • The power to apply structural remedies (e.g., business/asset divestments) if a gatekeeper has failed to meet its commitments on a consistent basis; and
  • The right to be informed of a gatekeeper's intended digital transactions (separate and in addition to merger control rules)
  • A small group of significant corporations acts as gatekeepers. This group of giant corporations, sometimes known as "Big Tech," are big technology companies that provide key platform services in digital marketplaces and are rising by the day thanks to the economic qualities of these services.

In that case, Gatekeepers can be defined as the Commission's definition of major enterprises that provide key platform services and surpass the quantitative standards established in the Article. The Commission looks to be curtailing the market power that major tech firms have highlighted with the Digital Markets Act proposal. The Commission believes that digital platforms add value to the European economy. The Commission, however, believes that digital platforms offer unique properties such as network effect, extreme economies of scale, and zero-priced services; the Commission evaluates that these features have aspects that can be abused. According to the Commission, the emergence of a small number of large platforms is an indication of this. The worrisome aspects of platforms are that platforms obtain the personal data of many people and enrich them by matching them with each other and that some platforms have control over systems.

According to the Commission, high investment costs, the risk of investments turning into sunk costs, and the difficulty accessing essential inputs such as data create high entry barriers to new entrants into the digital market, especially while major platforms have the market positions. As a result, new competitors entering the market cannot compete, no matter how innovative or efficient they are.

According to the European Commission, market functioning and competition for the primary regulated digital services do not provide fair results (Shaping of Europe's Digital Future). While competition rules may be enforceable against these platforms, competition law enforcement requires the determination of a dominant position in certain markets. Due to the Digital Markets Law, even if a company is not dominant, it will be bound by specific rules. In addition, long-term investigations and the necessity of case-specific investigation prevent competition law from producing quick solutions. On the other hand, while Articles 101 and 102 of the Treaty on the Functioning of the European Union, which regulates competition law, aim to protect competition, the legal interest protected by the Digital Markets Law is different. The Act's purpose is to ensure that the market in which it operates remains competitive and fair, regardless of the actual or potential effects of the gatekeeper company's manner.

These issues create problems in the applicability of the rapidly changing dynamic structure and ongoing antitrust lawsuits. The Digital Markets Acts have emerged as a necessity to prevent the abuse of the unavoidable dominant positions of the big actors of the digital world. Despite the regulations capable of defining traditional markets, a digital sector constantly changes and develops with daily innovation. This may sometimes emerge as a very narrow interpretation of markets because of the definition of the market. In addition, in terms of current sanctions/penalties, the economic power of the relevant gatekeepers deactivates the penalties and sanctions ineffective. This may cause the companies concerned not to hesitate to abuse their dominant position. Even while antitrust lawsuits and previous investigations are ongoing, developments make identifying and determining dominant positions in this market very difficult. This issue may become even more complex in the future. Considering their qualified human resources, financial power, and R&D power, new regulations may come in the competition for these gatekeepers, which may also be an important actor in artificial intelligence studies in the future.


1. Bellamy & Child (2001); "European Community Law of Competition", 5. Edition, Sweet & Maxwell, Pages 743 – 744

2. Posner, R.A (2000), "Antitrust in the New Economy", Social Science Research Network Paper Collection

3. Kamien M, and Schwartz N, Market Structure And Innovation (Cambridge Univ Press 1984)

4. Pleatsikas, C. ve Teece D. (2001), "The Analysis of Market Definition and Market Power in the Context of Rapid Innovation", International Journal of Industrial Organization, 19 (2001), s. 665-693

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