Proposal for a regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act)

In “A Europe Fit for the Digital Age”

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Online platforms – such as search engines, social media and e-commerce platforms – are playing an increasingly important role in our social and economic life. However, while the current EU rules for digital platforms have remained largely unchanged since the adoption of the e-Commerce Directive in 2000, a few large platforms are increasingly seen as becoming gatekeepers between businesses and consumers, with economic power and control over entire digital ecosystems, which makes it very challenging for rivals and new market entrants to compete and for competition authorities to adequately intervene. 

Against this backdrop, in December 2020, the European Commission published a proposal for a regulation on contestable and fair markets in the digital sector, otherwise referred to as the digital markets act (DMA). The DMA lays down harmonised rules aiming at regulating the behaviour of digital platforms acting as gatekeepers between business users and their customers in the EU. This approach entails a shift from ex-post anti-trust intervention to ex-ante regulation, and enshrines within EU law a set of ex-ante rules for the designation of gatekeepers and the design of ex-ante obligations and prohibitions that will radically change how large digital platforms are allowed to operate in the EU (for more information see below the briefing on Digital markets act :EU Legislation in Progress). In parallel, the Commission unveiled a proposal for a Digital Services Act (see separate fiche).

Following interinstitutional negotiations, the Parliament and Council reached a provisional political agreement on the DMA in March 2022. Parliament sitting in plenary approved the text in July 2022  with 588 in favour, 11 votes against and 31 abstentions. Council endorsed the text in July 2022 as well. The new DMA rules apply to those large companies – designated as gatekeepers – that provide an array of services, including social networks, video sharing, virtual assistants, web browsers, search engines and online advertising. The new legislation introduces a number of obligations for gatekeepers including an obligation to provide interoperable messaging services (interoperability of social media will be looked at in the next review) and an obligation to ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription. Furthermore, the DMA prohibits various practices such as self-preferencing (i.e. ranking their own products or services higher than those of others) or reuse of private data collected during provision of one service for the purposes of another service. The Commission will be the sole enforcer of the regulation – with help from a high-level group of digital regulators and in close cooperation and coordination with national authorities. Gatekeepers failing to comply will be subject to fines (up to 20 % of worldwide turnover for repeat offences) but also to structural remedies in cases of systematic non-compliance (a fixed-term ban on acquiring other companies).

Council and Parliament have signed the DMA in September 2022. The final text has been published in the Official Journal of the European Union on 13 October 2022. The DMA came into force on 1 November 2022.

The Commission has started the designation procedure. In July 2023, 7 companies (e.g. Alphabet, Amazon, ByteDance, Apple, Meta, Microsoft, Samsung) have declared meeting the thresholds. The Commission checked their submissions and on 6 September formally designated 6 gatekeepers (Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft) for specific platform services . 

The Commission published in October 2023 the template for the compliance report that designated gatekeepers will need to submit.


References:

Further reading:

Author: Tambiama Madiega, Members' Research Service, legislative-train@europarl.europa.eu

As of 20/06/2024.