December 20, 2021
Following the adoption of a revised text on the Digital Markets Act (DMA) by the Internal Market and Consumer Protection Committee on 23 November 2021, the European Parliament has now approved the text, meaning that negotiations with the Council of the EU can now go ahead.
The proposed Regulation will apply to large companies providing “core platform services”, which are perceived as most prone to unfair practices, if they meet the criteria for “gatekeepers”. These include online intermediation services, social networks, search engines, operating systems, online advertising services, cloud computing, and video-sharing services. This now also includes web browsers, virtual assistants and connected TV within the scope of the DMA.
Other changes introduced by MEPs are related to the definition of gatekeepers based on certain thresholds, the list of obligations and prohibitions, including new provisions on targeted advertising and on the interoperability of services, restrictions to “killer acquisitions”, EU enforcement, the role of national competition authorities and fines.
The approved text:
- increases the quantitative thresholds that would mean a company is covered by the DMA to €8 billion in annual turnover in the European Economic Area (EEA) and a market capitalisation of €80 billion; companies would also need to provide a core platform service in at least three EU countries and have at least 45 million monthly end users, as well as more than 10 000 business users;
- includes additional requirements on the use of data for targeted or micro-targeted advertising and the interoperability of services, e.g. number-independent interpersonal communication services and social network services;
- gives users the option to uninstall pre-installed software applications, such as apps, on a core platform service at any stage;
- foresees restrictions on “killer acquisitions”: where there is systematic non-compliance, the Commission would be able to restrict gatekeepers from making acquisitions in areas relevant to the DMA in order to remedy or prevent further damage to the internal market;
- clarifies the role of national competition authorities, while keeping the enforcement of the DMA in the hands of the Commission;
- ensures that whistle-blowers are able to alert the authorities to actual or potential infringements of the Regulation and protect them from retaliation;
- establishes that, if a gatekeeper does not comply with the rules, the Commission can impose fines of “not less than 4% and not exceeding 20%” of its total worldwide turnover in the preceding financial year.
Negotiations with the Council are planned to start under the French presidency in the first semester of 2022. To read the EU Parliament’s press release in full, click here.