Digital Markets Act: a European regulatory framework tailored to the digital age.
On 1 November 2022, the Digital Markets Act (Regulation 2022/1925) (DMA) came into force.
Together with the Digital Services Act, the DMA is part of a European digital services package to provide a Fair, secure and responsible European digital market.
The regulation provides additional rules specifically aimed at promoting a good digital economy in Europe.
Although the DMA already came into force, it will only become applicable from 2 May 2023.
Objective
The DMA aims to address problems with large online platforms. In this way, it seeks to make the business environment fairer for companies dependent on these platforms.
The regulation seeks to provide a regulatory framework within which innovative and start-up (technology) companies can compete and innovate without being bound by unfair conditions that limit their further development.
Scope
The DMA applies to so-called "gatekeepers" or "gatekeepers". To determine whether an internet giant qualifies as a gatekeeper, the DMA provides objective criteria.
A platform are identified as gatekeeper when:
- A platform has a strong economic position with a significant impact on the internal market and operates in several EU member states;
- Acts as an intermediary between companies and consumers for certain digital services (think search engines, social media, operating systems,...)
- And the platform has had a sustainable position in the market for a long time. This is the case when it met the above criteria for three consecutive financial years.
Nnew rules and prohibitions
In practice, this means that gatekeepers will be subject to a number of obligations:
- Offer companies access to the data they generate even on the platform;
- Provide advertisers with the necessary tools to analyse their ads;
- Allowing third parties to collaborate with the gatekeeper's own services in specific situations;
- Allow companies to promote their offerings on the platform and contract with customers outside the platform.
The prohibitions imposed on gatekeepers include:
- Rank own products higher or treat them more favourably than similar third-party products;
- Banning consumers from contacting businesses outside the platform;
- Tracking end users outside the gatekeeper's platform for the purpose of targeted advertising, without consent.
Sanction for breach
The European Commission can impose fines of up to 10% of global annual turnover. Fines can reach 20% when gatekeepers commit repeated infringements. The European Commission can also impose periodic financial penalties of up to 5% of average daily turnover.
Additional non-financial measures can also be imposed, such as forcing the gatekeeper to change behaviour or change company structure.
Questions about the Digital Markets Acts or about digital economy? Contact our specialists at info@bannister.be or 03/369.28.00
