The Digital Markets Act (DMA), a new regulation of the European Union (EU), started to apply in May 2023. The DMA is aimed to ensure fair and open digital markets in the EU. The DMA is targeted at large online platforms which have a strong economic position and a significant impact on the internal market as well as a strong intermediation position. Such companies may be designated as “gatekeepers”.
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By 3 July 2023, large online platforms that may meet the criteria set out in the DMA to qualify as gatekeepers were required to notify the European Commission (EC) for a thresholds check. Online platforms that are designated as gatekeepers will have to comply with certain “do’s” and “don’ts” in their daily operations. Non-compliance will result in fines of up to 10% of a company’s total worldwide annual turnover.
“Don’ts” include favouring services and products offered by the gatekeeper itself in ranking and preventing users from un-installing any pre-installed software or app if they so wish.
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Analysis shows that enforcement of the new obligations is likely to increase costs for end-users and business clients, reduce the supply and quality of services, and slow down the development of innovation- and technology-driven start-ups with strong growth potential. These outcomes will largely result from the new regulatory interventions rather than from business decisions driven by consumers and market processes.
