As dry and bureaucratic as EU legislation may seem, it can also be groundbreaking and, dare we say it, radical. The bloc has taken a global lead in tackling regulation in areas such as green taxonomy and the much-anticipated AI Act. European lawmakers are also at the forefront in trying to curb the seemingly ever-growing dominance of Big Tech.
The Digital Markets Act (DMA) is the EU’s tool to attempt to open the digital app marketplace up for smaller competitors. It sets criteria to identify the “gatekeepers” of the market and make them comply with a certain list of do’s and don’ts.
Among other things, the DMA will promote interoperability, forcing companies like Google, Apple, and Meta to let users link rival apps to their services. This means that Apple will need to release the tightly controlled (and heavily commissioned) grip it exerts through its app store.
In the words of Cédric O, France’s then-digital economy minister, upon the signing of the act last year, “Don’t break them up, break them open.”
Theoretically, it also means that users of different messaging apps will be able to contact each other from, say, WhatsApp to Telegram, but it is unclear how this would actually be implemented. It will also forbid the gatekeeper companies from doing things such as track their users outside core platforms for targeted marketing without consent.
While it entered into force on 1 November 2022, the DMA technically began applying yesterday, 2 May 2023. This means that potential gatekeeper tech companies now have until 3 July to notify their core platform services to the European Commission.
The Commission will then have 45 working days (until 6 September) to decide whether or not they pass the gatekeeper threshold. If the Commission concludes that the company in question does indeed meet the designated criteria, the gatekeeper will then have six months (until 6 March 2024) to comply with the requirements set out in the DMA.
In the case of non-compliance, the Commission can impose fines of up to 10% of the company’s total worldwide annual turnover. In the event of repeated infringements this can increase to 20% plus periodic penalty payments of up to 5% of the company’s total worldwide daily turnover.
Europe ‘strengthening digital sovereignty’
So who are the “gatekeepers?” According to the DMA, they are platforms in the digital markets that “have a significant impact on the internal market, serve as an important gateway for business users to reach their end users, and which enjoy, or will foreseeably enjoy, an entrenched and durable position.”
As with all legal texts, the criteria go into significant detail. Simplified, they entail that companies will be considered gatekeepers if they have a market capitalisation of more than €75 billion, and 45 million monthly active users in the EU.
There are 10 platform services listed in the DMA. These are:
- Online intermediation services;
- Online search engines;
- Online social networking services;
- Video-sharing platform services;
- Number-independent interpersonal communication services;
- Operating systems;
- Cloud computing services;
- Advertising services;
- Web browsers;
- Virtual assistants.
A company may be listed as a gatekeeper for more than one service.
Together with the Digital Services Act (DSA), the DMA forms one of the central columns of the EU’s digital strategies. They are both part of a regulatory program known as A Europe Fit For the Digital Age.
Adopted three years ago, it is part of the Commission’s ambition to make this Europe‘s ‘Digital Decade’ in which it will “strengthen its digital sovereignty and set standards, rather than following those of others – with a clear focus on data, technology, and infrastructure.”