The Digital Markets Act (DMA) regulation of September 14, 2022, along with the Digital Services Act (DSA) regulation, represents one of the major digital initiatives of the European Union.
Gradually applicable since May 2, 2023, it became fully effective on March 6 of this year.
The Digital Markets Act aims to ensure contestability and fairness in digital markets. It governs gatekeepers, which are large digital platforms serving as significant entry points between business users and consumers, potentially creating bottlenecks in the digital economy due to their position.
The DMA targets only companies that act as “gatekeepers” at the gateway to the internet. These are entities that have a significant impact on the internal market, serve as important access points for business users to reach their customers, and currently hold a strong and lasting position or will in the near future, regardless of whether they are established in Europe or elsewhere in the world.
As of last week, therefore, Apple, Alphabet (Google), Meta, Amazon, Microsoft, and ByteDance (TikTok) must fully comply with all obligations under the Digital Markets Act.
This regulation establishes new rules for 10 essential platform services, such as search engines, online marketplaces, app stores, online advertising services, and messaging services.
This text grants new rights to European businesses and end users. EU-established business users that rely on services offered by the six gatekeepers to reach their customers now benefit from new perspectives:
- Ensuring fair treatment and equal competitive conditions when competing with gatekeeper services on their platforms
- Requesting interoperability with gatekeeper services to offer new innovative services
- Selling their applications through channels other than gatekeeper app stores
- Accessing data generated by their activities on gatekeeper platforms
- Promoting offers and concluding contracts with customers outside the gatekeeper platform
End users also benefit from wider choices and innovations in the digital space within the European Union. They can:
- Once again choose freely and not be constrained by gatekeeper default choices, such as by turning to other app stores and services than those offered by gatekeepers
- Exercise better control over their data by deciding whether the gatekeeper can link their accounts and thus track and combine their personal data across different services
- Obtain, transfer, and use data easily from one service or application to another, allowing for data portability and easy movement between different services
- Use other electronic identification or payment services integrated into applications
It should be noted that the European Commission will not hesitate to take formal enforcement measures, and if it suspects a violation of the Digital Markets Act, it may even initiate an investigation of the potential infringement.
In the event of a violation, the commission may impose fines on companies of up to 10% of their total worldwide turnover, which can be increased to 20% in case of recurrence.
Moreover, in cases of systematic infringements, the commission is also empowered to adopt additional corrective measures, such as requiring a gatekeeper to sell all or part of a business or prohibiting it from acquiring additional services related to systemic noncompliance.
Finally, it is worth noting that the list of gatekeepers and the list of essential platform services they provide will be reviewed at least every three years.
This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee a similar outcome.
