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EU's Digital Markets Act (DMA): Ensuring Fair Competition On



  Mar 27, 2024

Digital Markets Act (DMA) of EU



The Digital Markets Act (DMA) is a key component of the European Union’s digital strategy, aimed at regulating the power of large online platforms, referred to as “gatekeepers,” to ensure fair competition and innovation in digital markets. Here’s a simplified explanation of its main points:

Understanding Gatekeepers

Gatekeepers in the digital world are large online platforms that:


◄ Possess a strong economic position and significant impact across multiple EU countries.
◄ Act as crucial intermediaries, connecting a vast number of users and businesses.
◄ Have a stable, enduring market presence, demonstrated over the past three years.

Benefits of the DMA

◄  Business Users: A fairer environment for businesses relying on gatekeepers, promoting competition.

◄ Innovators and Start-ups: More opportunities to compete and innovate without facing unfair terms.
◄ Consumers: Access to more services, the ability to easily switch providers, and enjoy fair prices.
◄ Gatekeepers: While maintaining their ability to innovate, they must avoid using their position to disadvantage others unfairly.

Obligations for Gatekeepers

Do’s


◄ Allow third-party services to work with the gatekeeper’s services.
◄ Let business users access their data on the platform.
◄ Provide advertisers with necessary tools and information for independent advertisement verification.
◄ Permit business users to directly promote and sell to customers outside the gatekeeper’s platform.

Don’ts


◄ Preferentially treat their products or services over those of others in rankings.
◄ Bar consumers from connecting with businesses outside the platform.
◄ Restrict users from removing pre-installed software or apps.
◄ Track users for targeted advertising without explicit consent.

Keeping the DMA Relevant

The European Commission will conduct market investigations to:


◄ Designate companies as gatekeepers.
◄ Update gatekeeper obligations as needed.
◄ Implement remedies for systematic rule breaches.

Consequences of Non-Compliance


◄ Fines up to 10% (or 20% for repeated breaches) of global annual turnover.
◄ Daily penalties up to 5% of average daily turnover.
◄ Remedial actions, including possibly restructuring parts of the business.

Implementation Timeline


◄ The DMA took effect in May 2023.
◄ Companies had two months to notify the Commission, which then has 45 working days to designate gatekeepers.
◄ Designated gatekeepers have six months to comply with DMA obligations.

The DMA addresses the previously unregulated or inconsistently regulated activities of gatekeepers, offering clearer obligations and reducing compliance costs. It marks a significant step towards ensuring that digital markets in the EU are fair, competitive, and innovative. 


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