Teodora Dubar – Digital Markets Act – a new era for digital platforms

A new age of regulation has begun for online large platforms with the entry into force (November 1st 2022) and start of the application (May 2nd 2023) of the Digital Markets Act („DMA”).

The DMA has come to offer a complementary view to competition law in regards to the scenery of emerging large online platforms, which have come to dominate the digital sector.

First of all, DMA applies to „gatekeepers”, defined as companies providing core platform services[1] with a significant impact on the internal market and which meet certain tresholds regarding their annual turnover.

Second of all, while competition law aims to protect undistorted competition on any given market, the declared objective of the new regulation is to ensure that markets on which gatekeepers operate are and remain contestable and fair, independently from the effects of the conduct of such gatekeepers from a competition perspective[2].

The main course of action provided by the DMA in order to achieve this objective is by way of establishing a set of ex ante measures, which means there has been a shift of perspective from regulating markets after the damage has already been done to preventing negative effects of unfair practices when such risks appear.

„Sector” application

There is much to be said on the application of the DMA and only time can really tell how effective this approach will be, but the most striking difference from competition law comes from the „sector” to which it applies.

The DMA does not apply to a certain „sector” of the economy, but rather to a particular group of entities (i.e. gatekeepers) whose common characteristics reside in their size and economic relevance. Although the companies that fall under the scope of the DMA are all providers of digital services, this cannot be regarded as meaning a certain sector, because „digital” is not a distinct sector of the economy. Therefore, the core platform services providing digital services may differ from one another in views of business model, technological viewpoint or final products[3].

What the DMA ultimately aims to protect is the fairness of the digital sector in a world marked by fast-paced technological improvements.

Enforcement measures

Regarding the enforcement of the DMA, the European Commission („the Commission”) must perform certain measures, such as[4]:

• Opening a market investigation for designating gatekeepers[5], review gatekeeper status[6];
• Determining, upon request, if the measures that a gatekeeper intends to implement of has implemented are effective[7];
• Monitoring the effective implementation and compliance with the obligations imposed on gatekeepers[8], opening a market investigation with the aim of finding systematic non-compliance[9]
• Adopting implementing provisions and guidelines on aspects of the DMA, in order to facilitate its implementation[10];
• Annual reporting to the European Parliament and to the Council on the implementation of the DMA and the achievement of its objectives[11];
• Evaluating the DMA every three years and reporting of the findings to the European Parliament, the Council and the European Economic and Social Committee[12];
• Adopting delegated acts for supplementing the DMA with regard to the obligations set out for gatekeepers[13].

Conclusion

Considering the specifics of the everchanging digital markets, a flexible approach on part of the Commission is more likely to ensure the enforcement of the DMA and to maintain fair and contestable markets on which gatekeepers operate.

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[1] Such as online search engines, online social networking services, video-sharing platform services, web browsers.

[2] Preamble of DMA, para. (11).

[3] Department for Digital, Culture, Media & Sport and Department for Business, Energy & Industrial Strategy (UK), „A new pro-competition regime for digital markets”, Consultation Document, July 2021, p. 7, observing that the term „digital markets” is „difficult to define given the increasing rate of adoption of digital technologies by businesses in all sectors of the economy”, apud P. Akman, „Regulating Competition in Digital Platform Markets: A Critical Assessment of the Framework and Approach of the EU Digital Markets Act”, 2022, 47 European Law Review 85, p. 18.

[4] J. Cremer, D. Dinielli, P. Heidhues, G. Kimmelman, G. Monti, R. Podszun, M. Schnitzer, F. Scott Morton, A. de Streel, „Enforcing the Digital Markets Act: Institutional Choices, Compliance, and Antitrust”, Policy Discussion Paper No. 7, Digital Regulation Project, 2022, p.7.

[5] Article 17 of the DMA.

[6] Article 4 of the DMA.

[7] Article 8 of the DMA.

[8] Article 26 of the DMA.

[9] Article 16, 18 of the DMA.

[10] Article 46, 47 of the DMA.

[11] Article 35 of the DMA.

[12] Article 53 of the DMA.

[13] Article 12 of the DMA.