In brief, Digital Markets Act (or shortly: DMA) is the European Commission proposal, aimed at regulating the major digital corporations, defined as “gatekeepers” in the EU.
What is the Digital Markets Act?
Initially put forth by the European Commission back in 2020, the Digital Markets Act (together with the Digital Services Act (DSA)) is primarily aimed at reducing the alleged risks to the competition in the digital sphere and providing the more efficient antitrust regulations in the EU.
In particular, the DMA implies the regulation of the major corporations working on the European digital market and is to impose a set of obligations on the largest Internet platforms, identified as “gatekeepers”.
- What is a gatekeeper?
Under the DMA, a term “gatekeeper” should refer to a company that operates the so-called “core platform service/s”, whose annual revenue is estimated at the 7,.500,000,000 EUR min. and market capitalization is at least 75,000,000,000 EUR. As for the number of users, a company needs to have 45,000,000 monthly End Users, as well as at least 10,000 of the so-to-speak “business users” per year to be defined as a “gatekeeper”.
- What is a core platform service?
Pursuant to the DMA, core platform services may include: online search engine/s, OS, web browser/s, voice assistant/s, online social network/s, video sharing platform/s, ad intermediaries, cloud computing and online mediation services.
Restrictions & Limitations
Some of the key restrictions, imposed on the gatekeepers, pursuant to the Digital Markets Act, include:
- restriction to combine End Users’ data across platforms without their explicit consent in accordance with GDPR,
- restriction to require that developers utilize core platforms’ payment services to get listed on the app store,
- restriction to pre-install the platform’s proprietary software (e.g. web browsers and other apps),
- restriction of the platform’s core service/s self-preference (e.g. in the online search results), and more.
In addition, gatekeepers are also required to:
- provide access to the ad performance data on the gatekeeper’s platform to publishers and advertisers,
- enable interoperability of the key functionality of their instant messaging services,
- inform the European Commission on their M&A deals, if any, and more.
In case of non-compliance with the DMA, a gatekeeper will be facing a fine of up to 10% of the company’s global turnover (up to 20% in case of a repeated violation). And their systematic failure to comply with the regulation will evoke the European Commission’s market investigation and potential behavioral/structural measures, accordingly.
Perspectives of Adoption
As expected, the DMA will not come into effect until 2023, given the provided 6-month time frame upon the successful vote in the European Parliament, which itself is yet to take place.
However, its actual impact on the EU digital market will in many ways depend on the enforcement practices, from the identification/challenge of designation of gatekeepers and the tech implementation of instant messengers’ interoperability, to the ongoing review of the platforms’ fair/unfair business practices.