The European Union’s Digital Markets Act (DMA) requires large companies to comply with extensive market rules while protecting competitors, customers and consumers (the market counterpart) to ensure that these platforms operate fairly and openly in the digital market. Companies, especially large digital platforms, need to consider several aspects in order to comply with the DMA:
- Gatekeeper criteria:
- Companies must determine whether they are considered “gatekeepers”. This applies to digital platforms that play a significant role in the market, such as social networks, search engines, online advertising platforms, cloud services, video sharing services, operating systems and online marketplaces.
- The thresholds for gatekeepers include an annual turnover in the EU of at least EUR 7.5 billion in the last three financial years or a market capitalization of at least EUR 75 billion as well as an active user base in the EU of at least 45 million monthly active end users and at least 10,000 annually active business customers.
- Duties and prohibitions for gatekeepers:
- Interoperability and data access: Gatekeepers must ensure that their basic platform services are interoperable with third-party services and allow business customers and end users to access their own data.
- Self-preferential treatment: Gatekeepers may not give preference to their own products and services over those of third-party providers.
- Advertising transparency: Gatekeepers must create transparency with regard to their advertising services and provide advertisers and publishers with detailed information.
- Pre-installation and standards: Gatekeepers must not require their own apps and services to be pre-installed or set as default.
- Compliance and reporting obligations:
- Gatekeepers are required to submit a detailed compliance report to the European Commission within six months of their appointment describing how they meet the requirements of the DMA.
- Gatekeepers must submit regular reports and data on their activities and work with the European Commission to ensure compliance.
- Penalties and sanctions:
- Failure to comply with the DMA can result in significant fines of up to 10% of the company’s annual global turnover. The Commission can also impose periodic penalty payments of up to 5% of average daily turnover.
- Repeated infringements may lead to additional sanctions, including structural measures such as divestment of company shares or business units.
- In the case of systematic infringements of the Digital Markets Act, gatekeepers may be subject to additional remedial measures. If necessary and as a last resort, non-financial remedial measures may be imposed. These measures may be of a behavioural or structural nature.
- Consumer protection and fairness:
- Companies must ensure that their business models and practices comply with the principles of consumer protection and fairness.
- The DMA aims to give consumers more control and choice while promoting competition in the digital market.
Companies should conduct comprehensive internal audits and compliance programs to ensure that they meet all requirements of the DMA. Cooperation with legal experts and regular reviews of EU directives and regulations are also crucial to staying up to date.
