The Digital Markets Act (DMA), a new set of regulations in the European Union aimed at reforming digital competition rules, is set to take effect today by midnight Brussels time. The DMA will impose legal requirements on six tech giants and more than 20 of their “core platform services” (CPS).
These tech giants, which have grown without much regulatory intervention, will now face strict rules on data usage, interoperability, and self-preferencing. The designated gatekeepers under the DMA include Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft.
Read on for an overview of the new law, its early impacts, and how it could change the landscape of digital business in Europe.
Rules of the road for gatekeepers
The aim of the DMA is to reduce the market power of Big Tech by imposing upfront obligations and restrictions on key players. This includes banning self-preferencing in search results, limiting the use of rivals’ data for product development, and ensuring user consent for ad targeting.
Data portability and interoperability are central to the regulation, with requirements for platforms to open up their services to competitors, fostering competition and reducing the dominance of the gatekeepers.
The criteria for a platform to be deemed an “important gateway” include revenue thresholds, user numbers, and the provision of core platform services in multiple EU member states. The DMA also allows for the designation of “emerging” gatekeepers to prevent future market monopolies.
The DMA is backed by significant penalties for breaches, up to 10% of global annual turnover for first-time offenses and up to 20% for repeat offenses. Enforcement will be overseen by the European Commission, with provisions for private litigation against non-compliant gatekeepers.
Which platforms are regulated?
The regulated core platform services include social networks, intermediation services, ads delivery systems, browsers, operating systems, interpersonal communication services, search engines, and video sharing platforms. The regulation may also extend to cloud computing services and virtual assistants in the future.
As more platforms reach the designated thresholds, they may be added to the list of regulated gatekeepers. Ongoing challenges to designations and compliance proposals are expected as the regulation takes effect.
How are platforms changing?
Gatekeepers are making adjustments to comply with the DMA, such as implementing new fees, opening up to competitors, and tweaking data processing practices. These changes may take time to fully implement and could impact competition and user experience in the digital market.
Despite some positive moves, there are concerns about the potential impact of new consent models and choice screens on user privacy and experience. The regulation aims to balance competition and innovation with user protection.
Will the DMA really make a difference?
The effectiveness of the DMA relies on user uptake of alternative services and platforms. Gatekeepers’ compliance, enforcement actions, and user engagement will determine the regulation’s success in promoting competition and innovation in the digital market.
The Commission faces challenges in enforcing the DMA, ensuring prompt action against non-compliance, and driving meaningful reforms in Big Tech business practices. Stakeholder engagement and industry-wide efforts will be crucial in achieving the DMA’s objectives.
How soon could we see enforcement?
The Commission is under pressure to enforce the DMA swiftly and effectively to address long-standing abuses by gatekeepers. Interim measures, investigations, and public scrutiny will play a role in monitoring compliance and driving reforms in the digital market.
The EU’s actions in the early days of DMA enforcement will set the tone for future interventions and shape the landscape of digital business in Europe. The Commission’s proactive approach and engagement with stakeholders will be critical in ensuring the DMA’s success in promoting fair competition and innovation.
