Digital Markets Act: Europe moves against big tech

The Digital Markets Act or DMA is a document put together by the European Union and currently still under review, which should come into force from October 2022. In brief, its main objective is to protect users and free up online competition, by offering an open but secure digital space.

Its content was carefully planned in order to avoid any objections and offer all interested parties fair solutions.  There are some limitations aimed at digital platforms which currently monopolise the internet, but also some new rules governing the use of private data for advertising purposes.

Restrictions aimed at overhauling the power of gatekeepers

Gatekeepers are those companies operating on the web which, due to their size and/or influence, have the ability to limit and/or impede smaller companies’ ability to compete. Unsurprisingly, the most important among these are Big Tech companies: well-established businesses which effectively operate an internet monopoly.

Intervention is crucial in order to put the brakes on such companies, not only because of fairness, but also to avoid the suppression of innovation (as it is difficult for new proposals to compete in terms of visibility) and uncontrolled price increases (as without competition the dominant company sets costs as it pleases).

As a response to this issue, the Digital Markets Act has introduced some ex ante obligations and some ex post sanctions, with the simple aim of reducing the gatekeeper powers (almost always drastic measures which directly obstruct the business operations of those companies that match specific profiles).

The Digital Markets Act and self-signalling

Despite the option of self-signalling being available to companies within two months of the decree’s introduction, the EU has reserved the right to act completely autonomously, by imposing targeted checks on all businesses that it believes may in some way:

• have a significant impact on the market;
• offer highly profitable company-user gateway services;
• occupy an established, long-term position in the relevant sector.

In addition, there are also quantitative features, which have garnered a lot of criticism from those involved.  The most noteworthy are:

• offering their services in at least 3 EU member states;
• recording a turnover of at least 7.5 million euros in the last three years or reaching 75 billion euros’ capitalisation in the financial market in the last year;
• have at least 45 million active end users per month and 10,000 commercial users per year in the EU.

These points allow the European Union the chance to accurately identify all gatekeepers operating inside its territory.  Following identification, these businesses are asked to comply with certain behaviours, which can be summarised as follows:

• ensure interoperability between platforms supplied by the gatekeeper and third party services, even if similar to those supplied by the gatekeeper itself;
• leave the user free to choose which applications to install, without imposing any particular one;
• allow companies to access the data generated on platforms managed by gatekeepers;
• allow those purchasing advertising to verify the results obtained;
• not monopolise the top positions in product classifications and ensure the same visibility to products or services offered by the competition;
• eliminate the obligation that developers use only certain services to publish their software in the store of a specific platform.

Of the various obligations that await Big Tech in the future, the most concerning seems to involve the question of interoperability.  According to critics of the DMA in fact, it could risk damaging the current equilibrium, with potential repercussions on the entire economy.