EU Publishes Final Digital Markets Act
European Union published, in the Official Journal of the European Union, the Digital Markets Act, also known as the EU Regulation 2022/1925 on contestable and fair markets in the digital sector. The Regulation is expected to impact a small number of large undertakings providing core platform services that have emerged with considerable economic power that could qualify them to be designated as gatekeepers pursuant to this Regulation. This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from May 02, 2023, with certain exceptions which shall apply from November 01, 2022 and June 25, 2023.
It is to be noted that if a digital service qualifies as a core platform service, this in itself does not give rise to sufficiently serious concerns of contestability or unfair practices. It is only when a core platform service constitutes an important gateway and is operated by an undertaking with a significant impact in the internal market and an entrenched and durable position, or by an undertaking that will foreseeably enjoy such a position in the near future, that such concerns arise. In particular, online intermediation services, online search engines, operating systems, online social networking, video sharing platform services, number-independent interpersonal communication services, cloud computing services, virtual assistants, web browsers, and online advertising services, including advertising intermediation services, all have the capacity to affect a large number of end-users and businesses, which entails a risk of unfair business practices. Therefore, they should be included in the definition of core platform services and fall into the scope of this Regulation. The notion of end users should encompass users that are traditionally considered business users, but in a given situation do not use the core platform services to provide goods or services to other end users, such as for example businesses relying on cloud computing services for their own purposes.
Gatekeepers are often vertically integrated and offer certain products or services to end users through their own core platform services, or through a business user over which they exercise control which frequently leads to conflicts of interest. Article 3 of the Regulation specifies quantitative thresholds to determine gatekeeper status. The specified thresholds include an annual turnover of over EUR 7.5 billion, a market capitalization over EUR 75 billion, 45 million active monthly end-users, and 10.000 yearly business users in the European Union. Those within the thresholds, as specified in Article 3 of the Regulation, are required to inform the European Commission. Gatekeepers shall introduce a compliance function, which is independent from the operational functions of the gatekeeper and composed of one or more compliance officers, including the head of the compliance function. As per the Regulation, an undertaking shall be designated as a gatekeeper if:
- it has a significant impact on the internal market;
- it provides a core platform service which is an important gateway for business users to reach end users; and
- it enjoys an entrenched and durable position, in its operations, or it is foreseeable that it will enjoy such a position in the near future.
Related Link: Digital Markets Act
Keywords: Europe, EU, Banking, Fintech, Regtech, Digital Markets Act, Gatekeepers, Bigtech, Regulation 2022/1925, Core Platform Services, Cloud Services, Cloud Computing, EP, European Council, EC
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