The EU has recently unveiled its much-expected landmark proposal for a Digital Markets Act (DMS). Twenty years after the introduction of the eCommerce Directive, the DMA envisages a new legal basis for competition and platform management, covering everything from content moderation to app stores, search and self-preferencing.
The DMA introduces rules for platforms that act as “gatekeepers” in the digital sector. These are platforms that have a significant impact on the internal market, serve as an important gateway for business users to reach their customers, and which enjoy, or will foreseeably enjoy, an entrenched and durable position. This can grant them the power to act as private rule-makers and to function as bottlenecks between businesses and consumers.
With an eye mainly to US big-tech, the Digital Markets Act is set to prevent gatekeepers from imposing unfair conditions on businesses and consumers and ensure the openness of important digital services. Examples of these unfair conditions that gatekeepers sometimes impose on others include prohibiting businesses from accessing their own data when operating on these platforms, or situations where users are locked into a particular service and have limited options for migrating to alternative service providers.
The enforcement system of the DMA is of particular importance, as the proposal does not seem to leave much space to national authorities. In fact, the European Commission shall be vested with extensive investigative powers (see Articles 19-21) and shall be able to impose fines and periodic penalty payments in case of non-compliance (Articles 26-27) of the same magnitude as in antitrust cases (up to 10% of annual turnover and 5% of daily turnover for fines and periodic penalty payments respectively).
In case of systematic non-compliance that has further strengthened or extended the gatekeeper’s position, the Commission may even impose behavioral or even structural remedies on the gatekeeper, including divestiture (Article 16). Structural remedies are a last resort penalty and can be imposed only if there are no equally effective behavioral remedies. The European Commission may also issue interim measures (Article 22) and accept commitments offered by the gatekeeper (Article 23).
Together with the Digital Services Act, the DMA is oriented at providing better protection to consumers and to fundamental rights online, establishing a powerful transparency and accountability framework for online platforms and leading to fairer and more open digital markets.
Harmonised across the EU and directly applicable, the new rules will make it easier to provide digital innovations across borders, while ensuring the same level of protection to all citizens in the EU.
Further information can be retrieved from the Commission’s dedicated webpage.