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The EU's Digital Markets Act (DMA) enters into force on 1 November 2022. It promises to be one of the most significant developments in the history of EU regulation, ushering in a new era for technology companies operating in the EU. In this communication we set out the background to the DMA, the companies whose services will be affected, the obligations that they will have, the consequences of non-compliance and the next steps in the DMA's application.
What are the aims of the DMA?
The DMA aims to ensure that EU digital markets are "fair" and "contestable." It recognises that digital services bring important, innovative benefits but envisions action to “reduce the dominance of large platforms who enjoy entrenched positions in digital markets;” these large platforms are known as "gatekeepers."
Who are the gatekeepers?
Gatekeepers are companies that provide "core platform services" ("CPS") and that have been designated as such by the European Commission. These companies have significant impact in the EU and provide a CPS which is an important gateway for business users to reach end users. Ten CPS are listed in the DMA, including: online search engines, social networking services, video-sharing platforms, operating systems, web browsers, virtual/voice assistants, online marketplaces and app stores. The Commission will make its first designation decisions before 6 September 2023. Gatekeepers will then have six months to comply with the DMA obligations.
What are the gatekeepers' obligations?
In short, gatekeepers need to comply with a set of DOs and DON’Ts including to:
✔ Allow third parties to interoperate with a gatekeeper's own services.
✔ Allow end users to easily uninstall software applications on a gatekeeper's operating system.
✔ Let end users switch between different software applications and services that are accessed using a gatekeeper’s CPS.
✔ Let business users conclude contracts with end users outside the platform.
✘ Prohibit self-preferencing (treating a gatekeeper's products and services more favourably than those of third parties).
What does the DMA mean for non-gatekeepers?
The DMA represents an opportunity for companies to enhance existing services, develop new services and otherwise innovate. It is crucial that third parties understand and make use of the DMA in order for its objectives to be achieved.
The obligations on gatekeepers will apply beginning in early March 2024 at the latest. Over the next few months, the Commission will host a series of technical workshops to give stakeholders the opportunity to discuss the practical application of the DMA. This is an important phase as much of the DMA’s effectiveness will be determined by the interpretation of the DMA’s articles and the scope and content of the Commission’s designation decisions. Any company affected by the DMA should consider making oral or written submissions to the Commission.
Source: Commission press release 30/10/2022.
Our Antitrust & Competition team can answer any questions that you have concerning the DMA and its impact on your company's operations.