What is the Digital Markets Act?
The Digital Markets Act introduces rules for platforms that act as “gatekeepers” in the digital sector. These are platforms that have a significant impact on the internal market, serve as an important gateway for business users to reach their customers, and which enjoy, or will foreseeably enjoy, an entrenched and durable position. This can grant them the power to act as private rule-makers and to function as bottlenecks between businesses and consumers.
The Digital Markets Act aims at preventing gatekeepers from imposing unfair conditions on businesses and consumers and at ensuring the openness of important digital services. Examples of these unfair conditions that gatekeepers sometimes impose on others include prohibiting businesses from accessing their own data when operating on these platforms, or situations where users are locked into a particular service and have limited options for switching to alternative services.
Common rules across the single market will foster innovation, growth and competitiveness, and facilitate the scaling up of smaller platforms, small and medium-sized enterprises and start-ups who will have a single, clear framework at EU level.
Who will be subject to the Digital Markets Act?
The Digital Markets Act will be applicable only to large companies that will be identified as “gatekeepers” according to objective criteria set out in the proposal. These are companies that play a particularly important role in the internal market because of their size and their importance as gateways for business users to reach their customers.
These companies control at least one so-called “core platform service” (such as search engines, social networking services, certain messaging services, operating systems and online intermediation services), and have a lasting, large user base in multiple countries in the EU.
Specifically, there are three main cumulative criteria that bring a company under the scope of the Digital Markets Act:
- A size that impacts the internal market: this is presumed to be the case if the company achieves an annual turnover in the European Economic Area (EEA) equal to or above € 6.5 billion in the last three financial years, or where its average market capitalisation or equivalent fair market value amounted to at least € 65 billion in the last financial year, and it provides a core platform service in at least three Member States;
- The control of an important gateway for business users towards final consumers: this is presumed to be the case if the company operates a core platform service with more than 45 million monthly active end users established or located in the EU and more than 10 000 yearly active business users established in the EU in the last financial year;
- An (expected) entrenched and durable position: this is presumed to be the case if the company met the other two criteria in each of the last three financial years.
If all of these quantitative thresholds are met, the specific company is presumed to be a gatekeeper, unless it submits substantiated arguments to demonstrate the contrary. If not all these thresholds are met, the Commission may evaluate, in the context of a market investigation for designating gatekeepers, the specific situation of a given company and decide to identify it as a gatekeeper on the basis of a qualitative assessment.
More Information can be found : Source: Digital Markets Act: Ensuring fair and open digital markets (europa.eu)
Photo Credit : https://pixabay.com/photos/online-marketing-internet-marketing-1246457/