In the late evening of 24 March, negotiators from the European Parliament, the Council of the European Union and the European Commission reached a provisional agreement on the Digital Markets Act (DMA). The DMA defines a set of obligations and restrictions on “core platform services” of very large platforms, also known as ‘gatekeepers’. Its aim is to ensure fair and contestable markets in the digital sector.
The political agreement on the DMA was reached only 15 months after the European Commission published the proposal. The French Presidency of the Council made the finalisation of the negotiations one of the top priorities of their current term. Up to the final trialogue negotiations on 24 March, which lasted eight hours, policymakers still needed to find consensus on some controversial aspects. Some of these topics, such as a ban on targeted advertising for minors, were moved to the Digital Services Act discussions.
Of key importance for Ecommerce Europe was the designation procedure for gatekeepers and the underlying definition of ‘end users’. The EU institutions agreed on the quantitative criteria for defining a gatekeeper. A company will be designated as such if it meets the following criteria:
- It has a market capitalisation of €75 billion or it generates an annual turnover of at least €7.5 billion in the European Economic Area, AND
- It records at least 45 million monthly end-users of its service and has at least 10,000 annual business users in the European Union, AND
- It is active in at least three EU Member States.
The methodology for the calculation of the end-users and business users has not yet been disclosed. You can reread Ecommerce Europe’s position paper on the subject here.
Most of the obligations for gatekeepers that were proposed by the Commission have been maintained in the final text, but have been further enhanced of amended. These new rules include restrictions on combining personal data from different sources, obligations to allow users to install apps from third-party platforms, prohibitions on bundling services, and a prohibition on self-preferencing practices. Gatekeepers will also have to give sellers access to their marketing or advertising performance data on the platform. A new addition to the DMA has been made regarding interoperability for messaging services.
The Commission is the sole enforcer of the DMA, in close cooperation with the Member States’ authorities. Infringements of the rules can be fined up to 10% of total worldwide turnover in the preceding financial year and up to 20% in case of repeat offence. In case of systematic infringements, the Commission may ban companies from acquiring other companies for a certain time. To be able to cope with its significant enforcement role, the Commission will add between 100-120 new staff members to the DMA task force.
On 19 April, the first consolidated version of the text is expected to be finalised, after which it will be checked by lawyer-linguists. Parliament and Council will then need to officially approve the text, with the former having provisionally scheduled to vote on it during the July plenary (4-7 July). The adopted text would likely officially enter into force by October 2022, with gatekeepers’ alignment and compliance with the rules to be due for February or March 2024.