Digital Markets Act

With the Digital Markets Act, the EU wants more fairness and less market dominance for large internet companies, so-called gatekeepers. All the news on the EU Digital Markets Act from the Table.media editorial team. What is the Digital Markets Act? With the Digital Markets Act, the European Union wants to curb the market power of technology giants such as Meta, Google and Amazon. Monopolies are to be prevented more quickly in future and competition is to be strengthened in return. The EU's Digital Markets Act (DMA for short) therefore obliges large companies, so-called gatekeepers of the economy, to be fairer. Consumers should also benefit from the ban on unfair conditions. Digital markets include all platforms that offer services or goods online or trade with them. Platforms such as hotel booking portals or search engines also meet this definition of digital markets. Like conventional markets, the digital market is characterized by the convergence of supply and demand. What does the Digital Markets Act contain? With the Digital Markets Act and the Digital Service Act (DSA), the EU Commission is launching two major pieces of digital legislation. The overarching aim is to make the big players on the internet more accountable. Companies will no longer be allowed to offer their products preferentially on their digital platforms (self-preferencing). Apple, for example, would then no longer be able to decide which apps end up in the app store. They would also no longer necessarily have to be paid for with Apple Pay. Amazon would also not be allowed to give preference to its own products over the competition. The same would apply to Google: If the search engine has previously given preference to its own services in the search engine, this practice would be definitively anti-competitive in future, according to the DMA. A hefty fine of EUR 2.4 billion was already imposed for this in November 2021. What measures does the EU Digital Markets Act contain? The Digital Markets Act also includes a list of prohibited business practices and more control over company takeovers. The EU can impose heavy fines for violations of the measures. The EU Parliament and the Commission are currently still arguing about the exact amount. Up to 20% of annual turnover is being discussed. The EU negotiating parties are also talking about breaking up companies in the event of systematic violations.another core element of the Digital Markets Act concerns the interoperability of messenger services. There is still no consensus on whether it will be possible to exchange messages between different messengers (e.g. Signal and Whatsapp) in the future. The regulations for personalized advertising are still being debated. It is likely that providers will soon no longer be allowed to use the data of minors to create advertising profiles. Further advances are being watched with interest and require further analysis. How do the Digital Market Act and Digital Service Act work together? In the course of digitalization, the Digital Market Act is to come into force together with the Digital Service Act (DSA) from 2023. While the DSA regulates the social influence of digital giants, the EU Digital Markets Act regulates economic influence. Both digital laws have already been approved by the EU Parliament and are now being negotiated with the Commission and member states. This model is also known as "trilogue negotiations" in European politics. One thing is clear: there is unlikely to be an agreement before the end of 2022. Who does the Digital Markets Act apply to? The EU Digital Markets Act applies in particular to the gatekeepers of the economy. These are companies that have a particularly large influence on the European single market. These include Google, Amazon and Apple. By definition, companies with an annual turnover of more than EUR 6.5 billion are considered gatekeepers. Their market value must be more than EUR 65 billion. In addition, they must have more than 45 million end users per month. The Digital Markets Act is therefore not explicitly intended for start-ups and smaller companies, and the exact criteria are still being negotiated, partly because European companies such as Spotify or Zalando could be affected. The limit could also be important in the case of Twitter. So far, it has not reached the proposed limit and would therefore not fall under the Digital Markets Act. What criticism is there of the Digital Markets Act? Apple fears that the DMA could be detrimental to the security of Apple smartphones. If apps from other providers are also downloaded from the App Store, this could restrict the privacy of Apple users. This opens up opportunities for cybercriminals and malware. But it's not just the gatekeepers/the industry that are critical of the DMA: the President of the German Federal Cartel Office also has objections. He demands that it should not be the authorities who have to provide evidence of breaches of the DMA, but that the platforms should bear the burden of proof. On the one hand, the digital association Bitkom sees advantages in greater competitive fairness. On the other hand, the DSA could slow down innovation. Interoperability would potentially make the same functions available to all users of messenger services. The association is concerned that this would remove incentives for the further development of services, as the EU is limiting the market power of some influential tech giants with the Digital Markets Act. The Table.Media editorial team provides summaries and analyses to find out whether interoperability will really happen and when the digital laws will be introduced.