What is it about?

The European Commission aims to ensure fair and open digital markets through the Digital Markets Act (DMA). This legislation intends to curb the market dominance of large platforms. The DMA seeks to harmonise the regulatory framework to ensure fairness and competition in the European Digital Single Market. It came into effect as a regulation on 1 November 2022, with rules mandatorily applied since 2 May 2023.

Who is affected?

The law targets large, systemically important platforms categorised as 'gatekeepers'. These platforms meet criteria such as exceeding €7.5 billion in annual turnover or having a market value of over €75 billion, with at least 45 million monthly end users and over 10,000 business users in the EU. Additionally, these platforms must offer core platform services (e.g., app stores, messaging services, online marketplaces) in at least three EU member states.

The law is aimed at companies whose core platform services have a significant influence and a stable, persistent market position.

What does the law include?

The DMA imposes specific prohibitions and obligations on gatekeepers, including self-preferencing bans, rules on data usage and interoperability, as well as non-discrimination provisions. Violations can lead to severe penalties, including fines of up to 20% of global (group-wide) annual turnover.

Example: Self-preferencing

Gatekeepers often serve as key entry points to the internet or online shopping for many users. However, their market power and wealth of data should not give them unfair advantages over smaller competitors or the businesses using their services.

The DMA therefore prohibits gatekeepers from combining personal data, self-preferencing in rankings, and using user data for advertising purposes. Additionally, they are prohibited from tying access to their services with other platform services.

What is important for businesses now?

Establishing a unified legal framework for digital markets across Europe enhances transparency and legal certainty. With the growing significance of the digital economy, it is crucial to prevent competition distortions caused by gatekeepers' market dominance.

Whether the DMA's interventions are proportionate and whether they hinder innovation remains to be seen in practice.