Regulation of big tech’s online dominance coming into force

Author Moonshot.news

Published on: 31/10/2022

The EU’s Digital Markets Act is in force from November and in six months, by May 2, it should be implemented in all EU countries. The DMA is meant to regulate big tech’s role in the online economy and limit their dominance. It was proposed by the Commission in December 2020 and agreed by the European Parliament and the Council in March 2022.

The DMA defines when a large online platform qualifies as a “gatekeeper”.  Companies operating one or more of the so-called “core platform services” are seen as gatekeepers. 

These services are app stores, online search engines, social networking services, certain messaging services, video sharing platform services, virtual assistants, web browsers, cloud computing services, operating systems, online marketplaces, and advertising services.

There are three main criteria that bring a company in the scope of the DMA:

1. A size that impacts the internal market: when the company achieves a certain annual turnover in the European Economic Area (EEA) and it provides a core platform service in at least three EU Member States;
2. The control of an important gateway for business users towards final consumers: when the company provides a core platform service to more than 45 million monthly active end users established or located in the EU and to more than 10,000 yearly active business users established in the EU;
3. An entrenched and durable position: in the case the company met second criterion during the last three years.

“do’s and don’ts” 

The DMA establishes a list of do’s and don’ts that gatekeepers will need to implement in their daily operations to ensure fair and open digital markets. The idea is that this will lead to increased online competition and innovation to the benefit of consumers.

“When a gatekeeper engages in unfair practices, such as imposing unfair access conditions to their app store or preventing installation of applications from other sources, consumers are likely to pay more or are effectively deprived of the benefits that alternative services might have brought”, EU Commission says.

With its entry into force, the DMA will move into implementation phase and start to apply in six months, as of 2 May 2023. After that, within two months and at the latest by 3 July 2023, potential gatekeepers will have to notify their core platform services to the Commission if they meet the thresholds established by the DMA. 

The Commission will be able to impose penalties and fines of up to 10% of a company’s worldwide turnover, and up to 20% in case of repeated infringements.