DMA Impact Remains Unclear on Deadline for ‘Gatekeeper’ Compliance

“The goal for the European regulators is to increase competition. We’re not sure that’s going to happen.” – Bill Echikson, CEPA

DMAAs of today, the world’s major platforms—Apple, Alphabet, Meta, Amazon, Microsoft and ByteDance—must be in full compliance with the European Union’s Digital Markets Act (DMA), an EU regulation intended to level the playing field in the digital marketplace.

Signed into law in September 2022, the DMA imposed a complex regulatory framework upon the major Internet services platforms that are deemed to be “gatekeepers” (i.e. have a market capitalization of at least €75 billion [$83 billion USD]) due to their dominant market position. These gatekeepers each market at least one “core platform service” (CPS) that connects large numbers of users and business interests.

The requirements that are directly applicable to gatekeepers are:

  • Processing and use of end-users’ personal data – prohibits a gatekeeper from processing end-users’ personal data using third-party services for online advertising purposes without users’ consent, from combining or cross-using personal data across CPS or between CPS and other services without users’ consent and from signing-in users to other services without their consent (Article 5(1)).
  • Parity clauses – requires a gatekeeper to allow its business users (e.g. app stores or marketplaces) to offer their products or services at different prices or conditions on third-party intermediation services or their online sales channels (Article 5(3)).
  • Anti-steering – requires a gatekeeper to allow business users (e.g. app developers) to promote their offers to end-users acquired through its CPS and to allow end-users to access services, content and subscriptions outside its CPS (Article 5(4) and 5(5).
  • Raising issues of non-compliance – prohibits a gatekeeper from preventing business users from raising issues of non-compliance with public authorities about its practices (Article 5(6)).
  • Tying – prohibits a gatekeeper from requiring business or end-users to use its web browser engine, identification or payment services (Article 5(7)).
  • Bundling – prohibits a gatekeeper from requiring business or end-users to subscribe to one of its CPS as condition to access another of its CPS (Article 5(8)).
  • Transparency concerning online advertising practices – requires a gatekeeper to provide advertisers and publishers with transparent pricing and remuneration information regarding online advertising practices (Article 5(9) and 5(10)).

(Source: Digital Markets Act Briefing)

A separate list of additional requirements will vary in their application to each gatekeeper and general obligations on anti-circumvention, concentrations and audits also apply.

This January, Apple announced changes to several of its digital services, including its App Store, following Apple’s unsuccessful appeal of their designation as a “core platform service” subject to the DMA. Apple was also fined more than €1.8 billion ($1.95 billion USD) by the European Commission earlier this week under Article 102(a) of the Treaty on the Functioning of the European Union (TFEU) following a complaint filed by Spotify, which alleged that Apple unfairly prevents companies from communicating alternative music subscription services that are available outside of Apple’s App Store.

Alphabet recently announced several changes to its core platform services in intermediation, including Google Maps, Google Play and Google Shopping services, along with its flagship Google Search service that will impact users across the European Economic Area (EEA). Those changes include new dedicated chips for finding shopping comparisons, app developer tools for leading users to external purchase offers, and a new application programming interface (API) incorporating data portability measures.

The EU’s enactment of the DMA has encouraged similar legislative initiatives in several other nations including Japan, South Korea, Brazil and the United Kingdom.

Independently audited compliance reports of all gatekeepers are now publicly available on the European Commission’s Digital Markets Act webpage and are meant to describe “in a detailed and transparent manner the measures they have implemented to ensure compliance with these obligations, and to publish a non-confidential summary of such reports.” These reports and summaries must be updated at least annually.

According to a press release issued today, the Commission will now analyze the reports and “assess whether the implemented measures are effective in achieving the objectives of the relevant obligations under the DMA.” Public input is also welcome, and the gatekeepers will each be holding public workshops in the coming weeks.

During a Center for European Policy Analysis (CEPA) press briefing held this week unpacking the DMA and its potential impact, Bill Echikson, Senior Fellow and Editor at CEPA, expressed uncertainty about the regulation’s success. “The goal for the European regulators is to increase competition. We’re not sure that’s going to happen. Because one, it’s going to be difficult to enforce. We found in the past Europe has had trouble enforcing its tech laws. Two, it’s difficult to really predict – there [are] a lot of unanswered questions, as we wrote, about this law.”

CEPA has also published a series of articles on the DMA.

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Copyright:tomloel

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