This Tuesday, May 2, marks the official implementation of the Digital Markets Law (DMA), known as the Regulation on digital markets in the territory of the European Union. As of now, the law is in a “transition” period, where the different actors must work together to carry out the final implementation of this new legislation.
· What is the Digital Markets Law?
The Digital Markets Law, or DMA, aims to regulate large digital companies and their economic activities in the European Union. More specifically, its objective is to limit the dominant economic position of the majority of digital platforms in the European territory, curb their anti-competitive practices -and the consequent dependence- and better protect users and consumers. It was voted on by the European Parliament on July 5, 2022, and finalized the following November.
The DMA goes hand in hand with the Digital Services Law (DSA), which aims to regulate the relationship between platforms and their users, and should enter into force at the end of August 2023.
· How will the implementation take place?
From this Tuesday, May 2 and until March 2024, companies must work to comply with all the requirements of the Digital Markets Law. Sanctions will be applied from this period if this is not the case.
· Who does the text affect?
The target companies are logically the GAFAMs (Google, Apple, Facebook, Amazon and Microsoft), as well as a handful of others, operating in at least three Member States of the Union. There are, among others, the Chinese companies AliBaba and AliExpress, the German seller Zalando, the Booking travel service or the social networks TikTok, Snapchat and Twitter.
The official text lists the services in question: intermediation services (such as marketplaces, app stores), search engines, social networks, video sharing platforms, online messaging systems, exploitation (including connected TVs), storage services online data collection, advertising services (such as advertising networks or exchanges), web browsers, and finally virtual assistants.
· What criteria define them?
To attack them, legislators now impose the name “gatekeeper” on them. The companies that can be classified as such meet several criteria, thus defined in article 2 of chapter III of the official text:
“[Si] has a significant weight in the internal market, [si] provides an essential platform service that is an important entry point for business users to reach their end users; AND [si] enjoys a solid and lasting position in its activities, or will, in all probability, enjoy such a position in the near future”.
Billing criteria and number of users come to refine the contours of this law. Thus, a company is a “guardian””[si] has achieved an annual turnover in the Union of EUR 7,5 billion or more in each of the last three financial years, or if its average market capitalization or equivalent fair market value has reached at least EUR 75 billion in the last exercise” .
In addition, it is concerned “if it provides an essential platform service that, during the last financial year, had at least 45 million monthly active end-users established or located in the Union.”
· What are their new do’s and don’ts?
A platform designated as “access controller” will now have to comply with a series of prohibitions and obligations. For the consumer, three strengths emerge:
– user consent will now be required for data cross referencing (from various services) for the purpose of creating advertising profiles;
– the end of pre-installed software on electronic devices and the facilitation of the use of alternative products, such as the possible use of alternative payment systems to the Apple App Store and the Google Play Store (two measures that are already underway)
– and, finally, the interoperability of messaging services, which will allow, very specifically, a WhatsApp user to chat with a Signal user.
· What are the risks for companies that do not comply?
The text initially imposes an economic penalty of up to 10% of the company’s annual turnover (ie, for example, 36 billion dollars for Apple, which reaches a turnover of 365 billion dollars in 2021), then the 20% in case of repeat offense.
In case of serious and repeated infringements, the Commission will open a market investigation or may impose a ban on practicing in the territory.
Source: BFM TV
