EU issues new digital markets laws to reign-in big tech firms

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The European Commission has today designated, for the first time, six gatekeepers – Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft – under the Digital Markets Act (DMA), as part of a new set of rules aimed at allowing more competition and offering consumers more choice.

In total, 22 core platform services provided by gatekeepers have been designated, the EC said in a statement.

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New tech laws: EU Digital Market Act names designated gatekeepers for first time.

The six gatekeepers will now have six months to ensure full compliance with the DMA obligations for each of their designated core platform services.

Digital markets laws

Under the DMA, the European Commission can designate digital platforms as ‘gatekeepers’ if they provide an important gateway between businesses and consumers in relation to core platform services.

Today’s designation decisions follow a 45-day review process conducted by the Commission after the notification by Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft and Samsung of their potential status as gatekeepers.

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EU timeline: Tech firms will have six months to comply with new DMA rules.

In particular, the Commission has established gatekeeper status with respect to the following specific core platform services:

In parallel, the Commission has opened four market investigations to further assess Microsoft’s and Apple’s submissions arguing that, despite meeting the thresholds, some of their core platform services do not qualify as gateways:

  • Microsoft: Bing, Edge and Microsoft Advertising
  • Apple: iMessage

Under the DMA, these investigations aim to ascertain whether a sufficiently substantiated rebuttal presented by the companies, demonstrate that services in question should not be designated. The investigation should be completed within a maximum of 5 months.

In addition, the Commission has opened a market investigation to further assess whether Apple’s iPadOS should be designated as gatekeeper, despite not meeting the thresholds. Under the DMA, this investigation should be completed within a maximum of 12 months.

In addition, the Commission has concluded that, although Gmail, Outlook.com and Samsung Internet Browser meet the thresholds under the DMA to qualify as a gatekeeper, Alphabet, Microsoft and Samsung provided sufficiently justified arguments showing that these services do not qualify as gateways for the respective core platform services.

Therefore, the Commission decided not to designate Gmail, Outlook.com and Samsung Internet Browser as core platform services. It follows that Samsung is not designated as gatekeeper with respect to any core platform service.

Next steps for designated gatekeepers

Following their designation, gatekeepers now have six months to comply with the full list of do’s and don’ts under the DMA, offering more choice and more freedom to end users and business users of the gatekeepers’ services.

However, some of the obligations will start applying as of designation, for example, the obligation to inform the Commission of any intended concentration.

It is for the designated companies to ensure and demonstrate effective compliance. To this end, they have  6 months to submit a detailed compliance report in which they outline how they comply with each of the obligations of the DMA.

The Commission will monitor the effective implementation of and compliance with these obligations.

Hefty fines

In case a gatekeeper does not comply with the obligations laid down by the DMA, the Commission can impose fines up to 10% of the company’s total worldwide turnover, which can go up to 20% in case of repeated infringement.

In case of systematic infringements, the Commission is also empowered to adopt additional remedies such as obliging a gatekeeper to sell a business or parts of it or banning the gatekeeper from acquisitions of additional services related to the systemic non-compliance.

In the future, additional companies could submit notifications to the Commission under the DMA, based on their self-assessment with respect to the relevant thresholds. In this context, the Commission maintains constructive discussions with all relevant companies.

Thierry Breton, European Commissioner for Internal Market, said: “More choice for consumers, fewer obstacles for smaller competitors: the DMA will open the gates to the Internet.

“With today’s designation we are finally reining in the economic power of 6 gatekeepers, giving more choice to consumers and creating new opportunities for smaller innovative tech companies, thanks for instance to interoperability, sideloading, real-time data portability and fairness.

“It was high time that Europe sets the rules of the game upfront, to ensure digital markets are fair and open.

Commissioner Didier Reynders, said: “The Digital Markets Act will help creating a level-playing field for all companies competing in the European digital market, as it will bring about more contestability and openness in markets.

“Today, we identified the first six gatekeepers that must respect the new rules set forth by the DMA.