The Digital Markets Act: Key points to note
Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector (Digital Markets Act, hereinafter “Regulation” or “DMA”) was published in the Official Journal of the European Union on the 12th of October and will enter into force on the 1st of November 2022.
This Regulation, applicable as of the 2nd of May 2023, aims to harmonise the rules relating to digital markets in order to ensure fair competition for digital businesses by imposing a set of obligations on large online platforms that possess the biggest share of the market and are dominant in the digital sector (“gatekeepers”).
Who are the gatekeepers?
Under the DMA, gatekeepers are considered to be undertakings which provide core platform services that (i) have a significant impact on the internal market, (ii) provide a core platform service which is an important gateway for business users to reach end users, and that (iii) enjoy an entrenched and durable position, in its operations, or it is foreseeable that it will enjoy such a position in the near future. Nonetheless, an undertaking is presumed to be a gatekeeper, provided that cumulatively (i) has had an annual turnover of EUR 7.5 billion or more in each of the last three financial years, (ii) has at least 45 million active end-users per month, (iii) can be shown to enjoy a deep-rooted and enduring position in its operations, having reached the milestone of 45 million active end-users per month in each of the last three financial years.
Companies that meet the conditions mentioned above must notify the European Commission within two months, i.e. by the 2nd of July 2023. However, failure to do so will not prevent the European Commission from qualifying them as such for the purposes of applying the obligations arising from the DMA.
This includes search engines, virtual assistants, social networks, messaging services, web browsers, video-sharing platforms, and other platforms, such as marketplaces provided to users, consumers or professionals in the E.U.
Which new limits now imposed on gatekeepers are worth highlighting under this Regulation?
To ensure fair competition, gatekeepers are namely prohibited from (i) processing, to provide a service, personal data collected in the provision of another service; (ii) imposing restrictions on the method of payment for their service, (iii) requiring users to subscribe to more services owned by them, (iv) over promote, in terms of ranking and crawling, their services and products over those of others. Gatekeepers are further required to (v) provide advertisers with transparent information regarding performance data and marketing-related pricing and (vi) allow portability of data provided by the end user.
It is also worth emphasising that gatekeepers must appoint a "head of the compliance function", whose name and contact details shall be provided to the European Commission.
Which sanctions are imposed for non-compliance?
In the non-compliance decision, the Commission may impose a fine on a gatekeeper of up to 10% of their total worldwide turnover in the financial business year. However, the fine amount may rise to 20% in case of a repeat of a similar infringement.
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