The European Union (EU) has recently proposed a new legislation that aims to create a fair and competitive digital market in Europe and beyond. The Digital Market Act (DMA) is a set of rules that would apply to large online platforms that act as gatekeepers for millions of users and businesses.
The DMA would impose obligations and prohibitions on these platforms to prevent them from abusing their dominant position and ensure that they offer fair access, choice and innovation to their customers and rivals.
The DMA is part of the EU’s broader digital strategy, which includes the Digital Services Act (DSA), a regulation that would update the liability and accountability framework for online intermediaries, and the European Data Governance Act (DGA), a law that would facilitate data sharing and reuse across sectors and borders.
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Together, these initiatives aim to create a digital single market that respects the fundamental rights and values of the EU, such as privacy, democracy and the rule of law.
The DMA is also a response to the growing influence and power of a few global tech giants, such as Google, Facebook, Amazon and Apple, which have been accused of engaging in anti-competitive practices, such as self-preferencing, bundling, tying, data scraping, blocking or discriminating against third-party services. These practices can harm consumers, competitors and innovation, and undermine the diversity and pluralism of the digital ecosystem.
The DMA would apply to platforms that meet certain criteria, such as having more than 45 million monthly active users in the EU, providing core platform services in at least three EU member states, and having an annual turnover in the EU exceeding 6.5 billion euros or a market capitalization of at least 65 billion euros.
These platforms would be designated as gatekeepers by the European Commission, which would have the power to monitor their compliance and impose fines or sanctions for non-compliance.
The DMA would require gatekeepers to comply with a list of dos and don’ts, such as:
Do not use data obtained from business users to compete with them or offer unfair advantages to their own services.
Do not prevent users from switching between or subscribing to different services or platforms.
Do not restrict or interfere with the interoperability or portability of data or services.
Do not favor their own services or products over those of competitors in ranking or displaying online offers.
Do not impose unfair terms or conditions on business users or end users.
Do allow third-party providers of ancillary services, such as payment, identification or advertising, to access their platform and compete on equal terms.
Do provide business users and regulators with access to data and information necessary to ensure fair competition and compliance.
The DMA would also empower the Commission to impose additional obligations or prohibitions on gatekeepers on a case-by-case basis, taking into account the specific features and effects of each platform and market.
Moreover, the DMA would enable the Commission to conduct market investigations and adopt structural remedies, such as divestiture or separation of businesses, in case of systematic non-compliance or serious threats to the internal market.
The DMA is a bold and ambitious proposal that could have significant implications for the global tech regulation landscape. It could set a precedent and a model for other jurisdictions that are grappling with similar challenges posed by the digital economy.
It could also trigger a dialogue and cooperation between the EU and other key players, such as the US, China or India, on how to foster a fair and sustainable digital transformation that benefits all stakeholders.
However, the DMA is not without challenges and controversies. It faces opposition and criticism from some of the affected platforms, which argue that it is disproportionate, discriminatory and detrimental to innovation and consumer welfare. It also raises legal and practical questions about its scope, criteria, enforcement and compatibility with existing rules and international agreements.
Furthermore, it requires political support and consensus from the EU member states and the European Parliament, which may have different views and interests on how to regulate the digital market.
The DMA is still a draft legislation that will undergo a long and complex legislative process before it becomes a binding law. It will likely face amendments, revisions and negotiations along the way. It will also have to adapt to the fast-changing and dynamic nature of the digital economy. Nevertheless, the DMA represents a significant step forward in the EU’s vision and ambition to shape the future of global tech regulation.