EU reaches agreement on the Digital Markets Act

25/03/2022 | European Parliament

The European Parliament, the European Commission and the Council of the European Union reached a provisional political agreement on the Digital Markets Act (DMA) late on Thursday evening following more than two months of trilogue negotiations. The provisionally agreed text targets large companies such as social networks or search engines offering "core platform services" and are often linked with market controlling business practices. Companies within the scope will have a market capitalisation of at least €75 billion or an annual turnover of €7.5 billion. To be designated as "gatekeepers", these companies must also provide specific services such as internet browsers, messenger applications or social networks, with a threshold of 45 million monthly end-users in the EU and 10 000 annual business users.

Parliament's Internal Market and Consumer Protection Committee, Andreas Schwab, said, "The agreement ushers in a new era of tech regulation worldwide. The Digital Markets Act puts an end to the ever-increasing dominance of Big Tech companies. From now on, they must show that they also allow for fair competition on the internet. The new rules will help enforce that basic principle. Europe is thus ensuring more competition, more innovation and more choice for users.

A press release from the Council of the European Union confirmed what Gatekeepers can and cannot do.

Gatekeepers will have to:

  • ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription
  • for the most important software (e.g. web browsers), not require this software by default upon installation of the operating system
  • ensure the interoperability of their instant messaging services’ basic functionalities
  • allow app developers fair access to the supplementary functionalities of smartphones (e.g. NFC chip)
  • give sellers 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)
  • reuse private data collected during a service for the purposes of another service
  • establish unfair conditions for business users
  • pre-install certain software applications
  • require app developers to use certain services (e.g. payment systems or identity providers) in order to be listed in app stores

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