Digital Markets Act

The EU Digital Markets Act (DMA) places obligations on providers of large online platforms (“gatekeepers”) to help increase competition and boost innovation and growth – including by requiring fair and non-discriminatory contractual terms to business and consumer users. The UK government is expected to publish a law with similar aims during 2023. Organisations will need to consider whether they need to file notifications regarding potential gatekeeper designation or whether they might benefit as a business user under obligations that will be imposed on gatekeepers.

Is the text of the law finalised yet? When will it apply?

Yes. The DMA is finalised. It entered into force on 1 November 2022 and the majority of its provisions (there are some limited exceptions) began to apply on 2 May 2023.

Who does it apply to?

The DMA primarily applies to “gatekeepers” offering “core platform services”. This includes “big tech” search engines, social networking services, video-sharing platform services, cloud computing services, online advertising services etc.

What are the key obligations?

The DMA provides obligations and prohibitions aimed at ensuring that digital markets are fair for participants. Examples include that gatekeepers should:

• disclose advertising prices/revenue share information to advertisers and publishers free of charge, on a daily basis;
• provide advertisers and publishers with free access to advertising performance measurement/ verification tools and data;
• provide anonymised ranking, query, click and view search data to any other third party undertaking that provides online search services
• allow end users to uninstall preloaded apps;
• allow hardware providers, business users and alternative service providers effective interoperability with hardware, software and operating systems available to the gatekeeper;
• provide effective portability of data provided by the end user of generated through the end user’s activities;
• apply fair, transparent and non-discriminatory terms in relation to any product ranking; and
• provide app developers with fair and non-discriminatory access to app stores, search engines and social networking services.

Examples of what gatekeepers should not do include:

• force business users or end users to use gatekeeper’s identification or payment service or web browser;
• make business users or end users subscribe or register to other core platform services as a condition of using the core platform services;
• apply obligations that prevent business users from offering the same goods/services to end users on better terms through their own or third party sales channels;
• engage in self-preferencing in ranking, indexing or crawling;
• use personal data of users for advertising purposes, unless the user has consented; and
• combine or cross-use personal data across services offered by the gatekeeper.

Does the UK have anything similar?

The Digital Markets, Competition and Consumers Bill (the Bill) was introduced into Parliament on 25 April 2023 and is expected to enter into force in 2024. The legislation will, among other things, underpin and provide statutory powers for the Digital Markets Unit within the Competition and Markets Authority, which will oversee a new digital regulatory regime, intended to promote greater competition and innovation in digital markets and protect consumers and businesses from unfair practices. The Bill will materially increase regulatory oversight of the digital sector, giving the regulator various powers, including powers to impose new conduct requirements on the largest firms.  

What are some of the commercial impacts of this law?

The DMA will have a significant impact on gatekeepers many of whom will be required to make substantial technical changes as well as amending contractual and policy documentation. Other organisations will be impacted too. Competitors of gatekeepers will benefit from the various obligations and restrictions imposed on gatekeepers such as greater interoperability. Those that use gatekeepers’ services will likely benefit from increased transparency in terms of pricing and product metrics. Overall, the intention of the legislation is to enable smaller organisations to innovate and compete with large, well-established providers, with a wider choice of products and services being available to consumers as a result.