Regulation (EU) 2022/1925, commonly referred to as the Digital Markets Act (DMA), is an EU regulation that aims to make the digital economy fairer and more contestable. The regulation entered into force on 1 November 2022 and became applicable, for the most part, on 2 May 2023.
The DMA intends to ensure a higher degree of competition in European digital markets by preventing large companies from abusing their market power and by allowing new players to enter the market. This regulation targets the largest digital platforms operating in the European Union. They are also known as "gatekeepers" due to the "durable" market position in some digital sectors and because they also meet certain criteria related to the number of users, their turnovers, or capitalisation. Twenty-two services across six companies - Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft - were named as "gatekeepers" by the EU in September 2023. These companies have until 6 March 2024 to comply with all of the Act's provisions.
The list of obligations includes prohibitions on combining data collected from two different services belonging to the same company (e.g. Facebook and WhatsApp); provisions for the protection of platforms' business users (including advertisers and publishers); legal instruments against the self-preferencing methods used by platforms for promoting their own products (preferential results for Google's products when using Google Search); articles concerning the pre-installation of some services (Android); regulation related to bundling practices; provisions for ensuring interoperability, portability, and access to data for businesses and end-users of platforms. In case of non-compliance, there will be enforced sanctions mechanisms, including fines of up to 10% of the worldwide turnover.
According to the European Commission, the main objective of this regulation is to regulate the behaviour of the Big Tech firms within the European Single Market and beyond. The Commission aims to guarantee a fair level of competition ("level playing field") on the highly concentrated digital European markets, which are often characterised by a "winner takes all" configuration.
The DMA covers eight different sectors, which it refers to as Core Platforms Services (CPS). Due to the presence of gatekeepers who, to a certain degree, affect the market contestability, the CPS are considered problematic by the European Commission: online search engines (e.g. Google Search); online intermediation services (e.g. Google Play Store, Apple's App Store); social networks (e.g. Facebook); video sharing platforms (e.g. YouTube); communication platforms (e.g. WhatsApp, Gmail); advertising services (e.g. Google Ads); operating systems (e.g. Android, iOS); cloud services (e.g. Amazon Web Services).
Background
EU Competition policy rules
The present rules applied within the European Union with regard to digital markets are derived from European and national legislation. Under these circumstances, the basis for competition rules in the EU is established by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). Article 101 addresses anti-competitive agreements and concerted practices that may affect trade between members states or reduce competition in the common market. Article 102 aims to tackle the abuse of dominant positions. All players operating in the common market are therefore subject to these provisions. European and national authorities have identified the need to strengthen the current legislation, given the structural problems that are not covered.
Digital policy in the EU
The Digital Markets Act is in line with the legislative developments undertaken by the Junker Commission between 2014 and 2019. One of the most important pieces of EU digital legislation is represented by the EU copyright rules. This has led to the protection, payment, and recognition of workers in thirty-three sectors and it aims to reward creativity, stimulate investment in the creative sector. Another relevant achievement can be considered the implementation of the General Data Protection Regulation (GDPR) in 2016. This regulation sets out the new European framework for the use and circulation of personal data and has a significant impact on the major digital players. In addition, the regulation on platform-to-business trading practices (P2B) has been established to create a fair, transparent and predictable business environment for smaller businesses and traders on online platforms. This regulation has applied in July 2020 and prevents market distortion, encourages healthy competition and prohibits unfair practices.