What is the Digital Markets Act (DMA)?
The Digital Markets Act is an EU regulation aimed at ensuring a fair and competitive digital economy, one of the three key pillars of the policy directions and goals outlined in the Communication “Shaping Europe’s Digital Future.” The DMA aims to protect businesses and end users from unfair conditions imposed by the so-called “gatekeepers” and to ensure the openness of important digital services.
On November 1, 2022, The Digital Markets Act came into effect. The new regulation introduces new rules for specific core platform services that act as “Gatekeepers” in the digital industry. These platforms significantly influence the internal market, serve as a gateway for business users to connect with their end users, and currently hold or are expected to hold a solid and enduring position in the market. This may give them the authority to operate as bottlenecks between businesses and end users and act as private rule-makers. The DMA will define a series of obligations they must respect, including prohibiting gatekeepers from engaging in certain behaviours.
Who Qualifies as a Gatekeeper?
A company qualifies as a gatekeeper if it provides one or more of the so-called “core platform services” listed in the DMA and meets the below-mentioned conditions. These services include online intermediation services such as app stores, certain messaging services, online search engines, social networking services, cloud computing services, video-sharing platform services, virtual assistants, web browsers, operating systems, online marketplaces, and advertising services.
Three major criteria determine whether a company is subject to the DMA:
1. Size Criteria: Has a strong economic position, significantly impacts the internal market, and operates in several EU nations.
2. Gateway Criteria: Has a significant intermediation position, connecting a large user base to a large number of businesses, when the company offers a core platform service to more than 45 million monthly active end users and more than 10,000 yearly active business users who are based in the EU.
3. Durability Criteria: Has (or is about to have) an entrenched and durable position in the market, meaning that it is stable over time if the company met the two criteria above in each of the last three financial years.
Major new Obligations
As per the DMA, Gatekeepers will be required to:
- Allow third parties to interact with the gatekeeper’s services in certain specific circumstances;
- Enable end users to download and install apps from other developers or app stores as long as it is compatible with the operating system of the access gatekeeper;
- Give users the same ease of use in opting out of the gatekeeper’s primary platform services as they do in signing up for them;
- Provide companies advertising on the platform with access to the gatekeeper’s performance measurement tools and information necessary for advertisers and publishers to conduct independent operations.
At the same time, Gatekeepers may no longer be able to:
- Prevent consumers from engaging with businesses outside of their platforms ;
- Compare similar services and products offered via the gatekeeper’s platform to those provided by third parties more favourably in terms of ranking;
- Prevent users from uninstalling any pre-installed software or apps even if they choose to do so;
- Track end users outside the gatekeeper’s main platform service for profiled advertising without giving effective consent.
The DMA became effective on November 1, 2022, after being published in the EU’s Official Journal on October 12, 2022. The regulation will apply from May 2, 2023, at which point undertakings meeting the criteria for gatekeepers will have two months to notify the Commission.
After six months, they must follow the DMA’s dos and don’ts if the Commission has designated them as gatekeepers. This will be the case from around March 2024.
How will it benefit Litfin and our partners?
The new EU regulation, aimed at ensuring a fair and open digital economy, is excellent news for LitFin’s bundled actions towards Google and Apple Inc. The set of obligations that the DMA has introduced can provide a sense of security to our prospective clients who are afraid to join our action because of potential retaliation from the so-called “Gatekeepers.” We could see that the DMA can benefit our prospective clients (app developers, publishers, and media houses) in the near future.
Please visit our website to know more about our ongoing cases related to Google and Apple Inc. If you are one of the companies affected by Apple/Google’s anti-competitive practices, please feel free to join our action.
To connect with us, email us at Merino@litfin.cz or Pardo@litfin.cz