EC Welcomes Political Agreement on Digital Markets Act
The European Commission (EC) and the European Parliament announced a provisional political agreement on the Digital Markets Act (DMA), which will be directly applicable across the European Union member states and implemented within six months after its entry into force.
The Digital Markets Act defines clear rules to ensure that no large online platform acting as a "gatekeeper" for a large number of users abuses its position to the detriment of companies whishing to access such users. The gatekeepers are defined as the companies that either have had an annual turnover of at least EUR 7.5 billion within the European Union in the past three years or have a market valuation of at least EUR 75 billion and must have at least 45 million monthly end-users and at least 10,000 business users established in the European Union. Also, the gatekeeper must control one or more core platform services in at least three member states that includes marketplaces and app stores, search engines, social networking, cloud services, advertising services, voice assistants, and web browsers. Small and medium enterprises are exempt from being identified as gatekeepers, with certain exceptions. As a key component of the European digital strategy, the Digital Markets Act, together with the Digital Services Act, aims to establish a comprehensive set of rules for all digital services.
The Digital Markets Act will prevent these gatekeepers from engaging in unfair business practices such as favoring their own services, reusing private data collected during a service, pre-installing certain software applications, preventing or slowing down valuable and innovative services of its business users and competitors, and imposing unfair access conditions to their app store. The gatekeepers will be subject to a number of clearly defined obligations and prohibitions by the European Commission, which will be the sole enforcer of the regulation, in close cooperation with authorities in the European Union member states. The Commission will be able to impose penalties and fines of up to 10% of a company's worldwide turnover and that may, in the event of repeated infringements, reach up to 20% of such turnover. In the case of systematic infringements, the Commission will also be able to impose any behavioral or structural remedies necessary to ensure the effectiveness of the obligations, including a ban on further acquisitions relevant to the infringement. The political agreement reached by the European Parliament and the Council is now subject to formal approval by the two co-legislators.
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Keywords: Europe, EU, Banking, Digital Finance, Digital Markets Act, Regtech, Platform Businesses, Online Marketplaces, Bigtech, EC
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