As of November 1st, 2022, the EU’s Digital Markets Act has entered into force and will begin to apply from May 2023.
The EU Digital Markets Act (DMA), which defines, designates and regulates “gatekeepers” came into force on November 1, 2022. The DMA defines when a large online platform qualifies as a “gatekeeper,” as well as a series of obligations and prohibitions to regulate these companies and avoid bottlenecks in the digital economy. According to the European Commission, gatekeepers are “digital platforms that provide an important gateway between business users and consumers – whose position can grant them the power to act as a private rule maker…” The Digital Markets Act seeks to regulate the behaviors of those companies which meet certain criteria, within “core platform services” including online intermediation services such as app stores, online search engines, social networking services, certain messaging services, video sharing platform services, virtual assistant services, web browsers, cloud computing services, operating systems, online marketplaces, and advertising services.
Companies which qualify as gatekeepers under the DMA must adhere to a list of dos and don’ts.
For a company to come under the scope of the DMA, it must meet three main criteria. For one, the company must provide a core platform service and have a size that impacts the internal market based on its annual turnover within the European Economic Area (EEA). In addition the company must control an important gateway for business users towards final consumers. This is typically the case when the company provides a core platform service to over 45 million monthly active end users in the EU and to more than 10,000 yearly active business users in the EU. When a company meets the latter criterion consistently over a period of three years, it is considered to have obtained a durable position in the market, allowing it to meet the final criteria to be considered a gatekeeper.The Digital Markets Act lists some dos and don’ts which these gatekeepers will need to adhere to in their day-to-day operations. This is in an effort to ensure fair digital markets allowing companies to contest markets and challenge gatekeepers.
The DMA will now undergo its implementation phase, and potential gatekeepers will soon have to notify the core platform services to the European Commission.
Over the next six months, the DMA will undergo its implementation phase, and potential gatekeepers will soon have to notify the core platform services to the European Commission. The Commission should be notified at the latest by 3 July 2023. The Commission will then undergo a 45 working day assessment as to whether the business meets the threshold to be considered a gatekeeper. Once designated, businesses which are considered gatekeepers will have an additional six months to comply with the requirements of the Digital Markets Act. The Commission is currently engaging with stakeholders within the industry to ensure effective compliance with the new rules. In addition, there will be a number of technical workshops for stakeholders starting December 2022.
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