Digital Markets Act

Summary

The law establishes a set of narrowly defined objective criteria for qualifying a large online platform as a so-called “gatekeeper.” Those designated as gatekeepers will have to:

• allow third parties to inter-operate with the gatekeeper’s own services in certain specific situations;
• allow their business users to access the data that they generate in their use of the gatekeeper’s platform;
• provide companies advertising on their platform with the tools and information necessary for advertisers and publishers to carry out their own independent verification of their advertisements hosted by the gatekeeper;
• allow their business users to promote their offer and conclude contracts with their customers outside the gatekeeper’s platform.

In addition, they can no longer:

• treat services and products offered by the gatekeeper itself more favourably in ranking than similar services or products offered by third parties on the gatekeeper's platform;
• prevent consumers from linking up to businesses outside their platforms;
• prevent users from un-installing any pre-installed software or app if they wish so;
• track end users outside of the gatekeepers' core platform service for the purpose of targeted advertising, without effective consent having been granted.

Gatekeepers found in violation of these rules, a fine of up to 10% of their total worldwide turnover can be imposed. For a repeat offense, this figure increases to 20% of its worldwide turnover and may be imposed with additional offenses resulting in a market investigation and resulting in behavioral or structural remedies. The European Commission will be the sole enforcer of the regulation.

Updates

March 25, 2022. The European Parliament and the Council of the European Union (EU) reached a provisional political agreement on the Digital Markets Act. For a platform to qualify as a gatekeeper, it must either have had an annual turnover of at least €7.5 billion within the E.U. in the past three years or have a market valuation of at least €75 billion. It must also have at least 45 million monthly end users and at least 10,000 business users established in the E.U.

It also should 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. The provisional agreement also creates a category for an ‘emerging gatekeeper’ to enable the Commission to impose certain obligations on companies whose competitive position is proven but not yet sustainable. Smaller businesses are exempt from being identified as gatekeepers, apart from in exceptional cases.

The provisional agreement is subject to approval by the Council and the European Parliament. The regulation must be implemented within six months after its entry into force. Once implemented, the Act will be directly applicable across the EU.

September 14, 2022. The DMA was published in the Official Journal of the EU. It will become applicable on May 2, 2023.

October 30, 2023. European Commission designates gatekeepers that will be covered by the act. The obligations for all core platform services are applicable 6 months after the date of the designation decision.