The Digital Markets Act (DMA) is a new regulation aimed at curbing the influence of tech giants in digital markets and promoting fair competition. The Commission has now designated several core platform services where gatekeepers must comply with a number of obligations. This gives business users new rights against big platforms.
The DMA aims to ensure fair and open competition on core digital platforms and digital markets. It also aims to ensure fair competitive conditions for business users and end users using a core platform service and to counteract the influence of tech giants so that gatekeepers cannot abuse their position to gain unjustified advantages. Therefore, the DMA sets out a number of obligations for large providers of core online platform services, which per example gives developers several new possibilities on the large platforms.
'Gatekeepers' and 'Core platform services'
The DMA sets out a number of criteria to identify gatekeepers, which are undertakings that:
- Have a significant impact on the internal market;
- Provide a core platform service that is an important gateway for business users to reach end users; and
- Enjoy an entrenched and durable position in the market or is likely to have such a position in the near future.
According to the DMA, an undertaking is presumed to be a gatekeeper when it:
- Had a turnover of at least EUR 7.5 billion in the EEA in each of the last three financial years, or its average or actual market capitalisation amounted to at least EUR 75 billion in the last financial year, and provides a core platform service in at least three EU member states;
- Provides a core platform service to more than 45 million monthly active end users established or located in the EU and to more than 10,000 annual active business users established in the EU; and
- Have met the second criterion for the last three years.
Core platform services can include online intermediation services, online search engines and online social networking services.
Potential gatekeepers had until July 3, 2023 to notify the Commission that they meet the thresholds to qualify as a gatekeeper, and the Commission then had 45 working days to determine whether the companies qualify as gatekeepers, including designating the gatekeepers' core platform services.
On September 6, the Commission designated the first six gatekeepers:
- Alphabet (Google)
- ByteDance (TikTok)
- Meta (Facebook)
The Commission has furthermore identified 22 core platform services offered by the aforementioned 'gatekeepers', including social networking services such as Facebook, Instagram, LinkedIn, TikTok, and mediation services such as Google Maps, Amazon Marketplace, Apples App store, Google Shopping, Meta (Facebook) Marketplace, etc.
The Commission has determined that Gmail, Outlook.com and Samsung Internet Browser should not be designated as core platform services - even though the other conditions for this were met.
The Commission considered that Alphabet, Microsoft and Samsung's arguments that the services cannot be considered as gateways were sufficiently substantiated.
The Commission is still investigating whether Microsoft's Bing, Edge and Microsoft Advertising services, as well as Apple's iMessage, constitute gateways and thus may be subject to the obligations of the DMA.
Gatekeepers now have six months to ensure that they comply with DMA obligations on the core platform services. The gatekeepers must, e.g.:
- Give business users access to their own data generated on the platform, e.g., a marketplace.
- Refrain from promoting its own products and services at the expense of third parties, e.g., in ranking search results ("self-preferencing").
- Allow the platform to be used for services where the related agreement has been concluded outside the platform. For example, using apps where the subscription is purchased outside the platform.
- Refrain from tying the use of two core platform services with one another, e.g., the use of Messenger with Facebook or an advertising service and a marketplace.
See more of the obligations and prohibitions that 'gatekeepers' are subject to in the regulation itself.
Complaints and enforcement
If gatekeepers fail to comply with obligations under the DMA on their core platform services, this may result in fines of up to 10% of the company's total worldwide annual turnover, and up to 20% in the event of repeated infringements, as well as penalties and other legal compulsory measures.
It is only the Commission which can enforce the DMA, but the Danish Competition and Consumer Authority is designated as a supporting authority in a draft act expected to be presented before the Danish Parliament on October 4, 2023. The draft act gives the Danish Competition and Consumer Authority the competence and powers to investigate gatekeepers' potential violations of the DMA. The legislative proposal also establishes that the Danish Competition and Consumer Authority is the competent authority in Denmark which may request the Commission to initiate market investigations under the Regulation.