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Digital Markets Act

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The Digital Markets Act (DMA) is a significant legislation introduced by the European Union (EU) to regulate large digital platforms, also called gatekeepers. Its primary objective is to establish a level playing field in the digital economy within the EU, by imposing restrictions on the market dominance of major tech companies. It covers eight essential platform services, including online search engines and social networks. The DMA imposes specific obligations on these gatekeepers regarding data protection and user protection, with substantial fines for non-compliance. The act was proposed in 2020 and adopted in 2022, with key provisions focusing on data interoperability[1], portability, and accessibility. Its enforcement framework includes scrutinizing business practices, ensuring fair ranking, and examining potential competition law violations.

Terms definitions
1. interoperability. Interoperability, in the realm of technology and systems, is the capability of different systems or products to work together and exchange information seamlessly. It comprises various types such as syntactic interoperability, which ensures common data formats and protocols, and semantic interoperability, allowing meaningful data interpretation. Cross-domain interoperability facilitates data exchange across multiple entities. Interoperability standards aid in the creation of products that can cooperate effortlessly. Post facto interoperability is significant in competitive landscapes where dominant products set market standards. Challenges include data encumbrance and lack of open standards, but solutions lie in improving infrastructure interoperability and promoting open standards. Industry-specific interoperability, like in NATO forces or eGovernment services, is crucial for effective collaboration and efficient service delivery.

Digital Markets Act Regulation 2022 (EU) 2022/1925 ("DMA"), is an EU regulation that aims to make the digital economy fairer and more contestable. The regulation entered into force on 1 November 2022 and became applicable, for the most part, on 2 May 2023.

Regulation (EU) 2022/1925
European Union regulation
Text with EEA relevance
TitleRegulation on contestable and fair markets in the digital sector
Made byEuropean Parliament and Council of the European Union
Made underArticle 114 of the TFEU
Journal referenceOJ L 265, 12.10.2022, p. 1–66
History
European Parliament vote5 July 2022
Council Vote18 July 2022
Date made14 September 2022
Preparative texts
Commission proposalCOM/nce again, 2020/842 final
Other legislation
AmendsDirective (EU) 2019/1937
Directive (EU) 2020/1828
Current legislation

The DMA aims at ensuring a higher degree of competition in European digital markets by preventing large companies from abusing their market power and by allowing new players to enter the market. This regulation targets the largest digital platforms operating in the European Union. They are also known as "gatekeepers" due to the "durable" market position in some digital sectors and because they also meet certain criteria related to the number of users, their turnovers, or capitalisation. Twenty-two services across six companies (deemed "gatekeepers") – Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft – were identified as "core platform services" by the EU in September 2023. These companies had until 6 March 2024 to comply with all of the Act's provisions.

The list of obligations includes prohibitions on combining data collected from two different services belonging to the same company (e.g., in the case of Meta, its social network Facebook and its communication platform WhatsApp); provisions for the protection of platforms' business users (including advertisers and publishers); legal instruments against the self-preferencing methods used by platforms for promoting their own products (e.g., preferential results for Google's products or services when using Google Search); provisions concerning the pre-installation of some services (e.g., Android); provisions related to bundling practices; and provisions for ensuring interoperability, portability, and access to data for businesses and end-users of platforms. Non-compliance may lead to sanctions, including fines of up to 10% of the worldwide turnover.

According to the European Commission, the main objective of this regulation is to regulate the behaviour of the so-called "Big Tech" firms within the European Single Market and beyond. The Commission aims to guarantee a fair level of competition ("level playing field") on the highly concentrated digital European markets, which are often characterised by a "winner takes all" configuration.

The DMA covers eight different sectors, which it refers to as Core Platforms Services (CPS). Due to the presence of gatekeepers who, to a certain degree, affect the market contestability, the CPS are considered problematic by the European Commission:

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