The rapid growth of technology has given certain digital platforms unprecedented power and influence. Recognizing the need for regulation, the European Union (EU) introduced the Digital Markets Act (DMA), aiming to foster a more equitable digital landscape.
This article unpacks the complexities of the DMA, including its objectives, who it applies to, and what companies designated as “gatekeepers” are required to do.
The DMA introduces a regulatory framework for platforms that function as gatekeepers in the digital economy. These are platforms that:
The core aim of the DMA is to prevent these gatekeepers from imposing unfair conditions on businesses and end users. It also seeks to ensure that critical digital services are open and accessible. For example, gatekeepers must allow users to easily uninstall pre-installed apps and ensure business users can access performance data related to advertising campaigns.
Not all companies are subject to the DMA’s regulations. Only companies designated as gatekeepers by the European Commission must comply with its provisions. The designation is based on three main criteria:
Companies meeting these criteria can present arguments to rebut their designation, and the Commission can also designate companies based on qualitative assessments.
✅ Gatekeepers are required to:
❌ They are prohibited from:
Upon designation, gatekeepers have six months to comply with the DMA and provide a compliance report. Immediate obligations include establishing a compliance function and reporting on intended mergers or acquisitions.
Failure to comply can result in fines up to 10% of the company’s global turnover, or even up to 20% for repeated offenses. In extreme cases, additional remedies like forced divestitures may be applied.
📣 The European Commission has released a standard template for the compliance report that gatekeepers, such as Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft, must submit under the Digital Markets Act. This report should be thorough and transparent, encompassing all fundamental platform services. Its purpose is to enable the Commission to assess whether these gatekeepers are adhering to the DMA regulations. Gatekeepers need to complete and submit this compliance report within six months of their designation, with subsequent annual updates required.
The DMA will force the gatekeepers to make their messaging platforms work smoothly with others. However, this only happens if smaller service providers ask for it. After a gatekeeper is officially designated, they have six months to make simple features, like individual text messaging, compatible with other services. More advanced features like group messages or video calls will be phased in over two to four years.
It’s crucial to note that smaller service providers aren’t required to make their platforms compatible in return. Also, users have the freedom to choose whether they want to use this cross-service functionality. The DMA assures that this change won’t compromise security or data encryption.
The DMA will make sure that big tech firms provide fair and unbiased access to digital marketplaces like app stores. They have to publicize their access conditions, and if there are disagreements, an alternative way to resolve disputes must be provided.
The European Commission has launched investigations into companies like Microsoft and Apple to ascertain whether they qualify as gatekeepers under the DMA.
Some of these investigations are to challenge the companies’ own assertions that they shouldn’t be considered as gatekeepers, despite meeting the criteria. Another line of inquiry is to examine specific operating systems like iPadOS to see if they act as essential pathways between businesses and consumers.
The DMA and DSA are two different pieces of legislation with distinct goals.
While both could apply to a single service, the DMA focuses on creating fair competitive conditions in digital markets, and the DSA is more concerned with the responsibilities and rights of users and online platforms. However, they can complement each other in specific areas like regulating online ads.
The European Commission has the responsibility to ensure that the DMA is followed across all EU member states. However, it will work closely with national agencies and courts to monitor compliance.
Yes, if a company fails to follow the DMA’s rules, people can take them to court in their home country to seek compensation.
Existing competition laws can handle some issues, but they aren’t equipped to deal with the unique challenges posed by digital markets. That’s where the DMA comes in, offering a more focused approach to regulating large tech companies.
The DMA operates under Article 114, which is designed to ensure a smoothly functioning single market across the EU.
The DMA is designed to be adaptable. The European Commission has the power to update the rules as technology evolves, ensuring the regulations remain relevant and effective.
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