DMA: Council gives final approval to new rules for fair competition online

On 18 July, the Council gave its final approval on new rules for a fair and competitive digital sector through the Digital Markets Act (DMA).

The DMA ensures a digital level playing field that establishes clear rights and rules for large online platforms (‘gatekeepers’) and makes sure that none of them abuses their position. Regulating the digital market at EU level will create a fair and competitive digital environment, allowing companies and consumers to benefit from digital opportunities.

With the final adoption of the Digital Markets Act, we will finally make large online platforms responsible for their actions. Hereby, the EU will change the online space worldwide. The gatekeepers that the DMA addresses are omnipresent – we all use their services on a daily basis. However, their power is growing to an extent that negatively affects competition. Thanks to the DMA, we will ensure fair competition online, more convenience for consumers and new opportunities for small businesses.

Ivan Bartoš, Deputy Prime Minister for Digitisation and Minister of Regional Development

New rules for gatekeepers

The DMA defines new rules for large online platforms (“gatekeepers”). They now have to:

• ensure that unsubscribing from core platform services is just as easy as subscribing
• ensure that the basic functionalities of instant messaging services are interoperable, i.e. enable users to exchange messages, send voice messages or files across messaging apps
• give business users access to their marketing or advertising performance data on the platform
• inform the European Commission of their acquisitions and mergers

But they can no longer:

• rank their own products or services higher than those of others (self-preferencing)
• pre-install certain apps or software, or prevent users from easily un-installing these apps or software
• require the most important software (e.g. web browsers) to be installed by default when installing an operating system
• prevent developers from using third-party payment platforms for app sales
• reuse private data collected during a service for the purposes of another service

If a large online platform is identified as a gatekeeper, it will have to comply with the rules of the DMA within six months.

If a gatekeeper violates the rules laid down in the DMA, it risks a fine of up to 10% of its total worldwide turnover. For a repeat offence, a fine of up to 20% of its worldwide turnover may be imposed.

If a gatekeeper systematically fails to comply with the DMA, i.e. it violates the rules at least three times in eight years, the European Commission can open a market investigation and, if necessary, impose behavioural or structural remedies.

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Background

The EU’s legal framework for digital services had not changed since the adoption of the e-commerce directive in 2000. In the meantime, digital technologies, business models and services have changed at an unprecedented pace. To keep up with this pace, the European Commission presented a digital services package comprising the Digital Services Act (DSA) and the Digital Markets Act (DMA) in December 2020.

The digital services package is the EU’s response to the need to regulate the digital space. Together, the DSA and the DMA define a framework adapted to the economic and democratic footprint of digital giants and introduce measures to protect users while supporting innovation in the digital economy.

On 25 November 2021, less than a year after the start of negotiations in the Council, member states unanimously agreed on the Council’s position on the DMA.

On 24 March 2022, the Council and the European Parliament reached a provisional agreement on the DMA, which was endorsed by EU member states’ representatives on 11 May 2022.

The provisional agreement on the DSA that was reached by the Council and the European Parliament on 23 April 2022 and adopted in European Parliament on 5 July is expected to be adopted by the Council in September 2022.

Next steps

Following the Council’s approval today of the European Parliament’s position, the legislative act was adopted.

After being signed by the President of the European Parliament and the President of the Council, it will be published in the Official Journal of the European Union and will start to apply six months later.

Source

European Council — Press release