The European Union has announced a new set of digital rules, the Digital Markets Act (DMA), that aims to limit the dominance of six major tech companies in the online sector. The DMA targets Apple, Microsoft, Meta (formerly Facebook), Google, Amazon, and ByteDance (owner of TikTok), which have been designated as “online gatekeepers” by the EU.
The DMA defines online gatekeepers as large digital platforms that provide core platform services, such as online search engines, app stores, social networks, online intermediation services, cloud computing services, and online advertising services. These platforms have a significant impact on the internal market and the opportunities and choices of business users and end users.
According to the EU, online gatekeepers have the ability to exploit their market power and engage in unfair practices that harm competition, innovation, and consumer welfare. Some of these practices include self-preferencing their own services, imposing exclusivity or interoperability restrictions, leveraging data across markets, and limiting access to essential features or functionalities.
To prevent such practices, the DMA imposes a list of dos and don’ts on online gatekeepers. For example, online gatekeepers will have to:
- allow business users and end users to access and use data generated by their activity on the platform;
- allow business users to promote their offers and conclude contracts with their customers outside the platform;
- allow end users to uninstall any pre-installed software or app on their devices;
- allow third-party providers of ancillary services to access their platform under fair and non-discriminatory conditions;
- refrain from using data obtained from business users to compete with them;
- refrain from combining personal data from different sources without the consent of the end user;
- refrain from ranking their own services higher than those of competitors in search results or app stores;
- refrain from imposing unfair terms or conditions on business users or end users.
The European Commission will be responsible for enforcing the DMA. Companies that violate the DMA can be fined up to 10% of their global revenue.
The DMA is part of the EU’s broader digital strategy that aims to create a fair and competitive digital single market that benefits both businesses and consumers in the EU. It was proposed in December 2020 and adopted in 2022. It entered into force in 2023 and will apply directly to all EU member states.