EU Digital Markets Act a step closer to reality as committee endorses provisional agreement

The Digital Markets Act lays down obligations for large online platforms acting as 'gatekeepers' and will allow the Commission to sanction non-compliant behavior

Digital Markets Act
Digital Markets Act

The European Parliament’s Internal Market Committee (IMCO) endorsed a provisional agreement with EU governments on the Digital Markets Act (DMA) with 43 votes in favour, one against and one abstention.

Together with the parallel Digital Services Act (DSA), the DMA will address a number of societal and economic issues by reigning in the market power of big online platforms to make digital markets safer, fairer and more competitive.

Andreas Schwab (EPP), who led the negotiations on behalf of Parliament, said Monday's overwhelming majority shows that the European Parliament stands united against “the unfair practices of gatekeepers".

"This is the penultimate step for the DMA to enter into force - for me, it has always been important to fast-track this law while making it better. Now, after the vote in plenary in July, we as the Parliament will hold the Commission accountable for how fast it implements the provisions.”

The rules will apply to large companies, designated according to criteria within the act as “gatekeepers”, whose dominant online position make them almost impossible for consumers to avoid.

To be designated as a gatekeeper, a company has to provide “core platform services” that render it prone to unfair business practices. This may include platforms such as social networks, messengers, virtual assistants, or search engines whose turnover in the EU exceeds €7.5 billion or a market value exceeds €75 billion, and at least 45 million monthly end users and 10,000 annual business users.

Gatekeepers will have to fall in line with a series of obligations, including that their messaging services be interoperable with smaller ones. This results in smaller platforms being able to request dominant messaging platforms to allow their users to exchange messages, send voice messages or files across messaging apps. This would give users greater choice and avoiding “lock-in” effects where they would be restricted to one app or platform.

Gatekeepers will have to allow users to easily uninstall any pre-loaded software apps and let users easily modify default app settings that steer them towards the gatekeeper's products or services. Users will also have the possibility to use third-party applications and app stores.

Large online platforms will also no longer be able to process users’ personal data, unless consent is explicitly given.

Non-compliance with these prospective rules will result in serious penalties.The European Commission will be legally permitted to impose fines of up to 10% of a gatekeepers total worldwide turnover in the preceding financial year, and heavier penalties up to 20% in case of repeated non-compliance.

In case of serious systematic infringements, the Commission may ban gatekeepers from acquiring other companies for a certain time (so-called killer acquisitions).

The provisional agreement on the sister proposal on the regulation of online platforms, the Digital Services Act, was agreed on 23 April 2022. Both proposals are forecast to be put for a final vote in Parliament in July before they are formally adopted by Council and published in the EU Official Journal.

The DMA regulation will go live 20 days following the publication and the provisions will start to apply six months after the publication is released.

Ewropej Funded by the European Union

This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The European Parliament is not responsible for any use that may be made of the information it contains.

More in Ewropej