Digital Services Market Act – Time to get it Together

The Digital Markets Act (DMA) is a piece of EU legislation designed to promote fairness and contestability in digital markets by placing requirements on platforms serving as "gatekeepers" in the industry.

The DMA is a part of the EC's comprehensive regulatory approach to uphold consumer rights and foster competition in the market for digital services. The Act will become operative on November 1, 2022. Gatekeepers will then have a six-month grace period until the DMA's regulations take effect on May 2, 2023.

DMA aims to stop the top corporations in the IT industry from abusing their dominating position. The DMA introduces a fairly well defined player, the 'Gatekeeper' regulating their market behaviour. Think Apple Store, Google Play, Facebook...

As a result of DMA being enacted, big tech businesses operating in Europe are entering a new phase since it will make Gatekeepers (and aspiring Gatekeepers) subject to more regulations and force them to fundamentally alter their business models. Businesses and people will look into the new policy and file lawsuits as a result.

A Gatekeeper:

• has a significant impact on the internal market;
• is a provider of the core platform service, which is important for business users to reach the end users of the service;
• enjoys or in the future can be expected to enjoy an “entrenched and permanent position” in the market.

As one can guess, being a Gatekeepers comes with several obligations. According to DMA, Article 5, Gatekeepers cannot:

• combine personal data from the services with data collected through other services of the same Gatekeeper or a 3rd party;
• offer the same products or services to end users through 3rd party online intermediary services at prices and terms different from those offered by Gatekeeper
• direct or indirect prevent end users from initiating any protection procedures with respective authorities;
• require end users or business users to subscribe to, or register for any other service as a condition of accessing, registering, or using any of the Gatekeeper services.

Article 6, takes this a step further, Gatekeepers must:

• refrain from using any data that is not publicly available and that was generated by the activities of business users;
• allow end users to uninstall any pre-installed software applications on their underlying service without prejudice to Gatekeeper’s ability to restrict such uninstallation with respect to software applications that are necessary for the operation of the operating system;
• provide access to Gatekeeper’s performance measurement tools and information needed by advertisers and publishers to perform their own independent verification of ad inventory to advertisers and publishers, at their request and free of charge, etc.

Non-compliant Gatekeepers will be fined up to 10% of its total worldwide turnover - and up to 20% in the event of repeated violations.

The DMA is intended to complement EU and national competition law. Anti-cartel, anti-abuse of dominant position, and merger control laws are unaffected by the application of the DMA.

DMA deployment is coming at a difficult time for gatekeepers (and aspiring gatekeepers). For example, how can search engines negotiate and agree on ranking, querying, clicking and displaying data with competitors? And how is such data anonymized? But as always, nothing is black or white. At the same time as the ‘Bit Un’s’ might find this stifling and unattractive. DMAs also offer opportunities for smaller core platform service providers and business users in their business relationships with gatekeepers.