On 14^th September 2022, the Council of the European Union and EU Parliament signed the Digital Markets Act (DMA) which aims to ensure a level playing field in the digital sector.

The DMA primarily places prohibitions on large online platforms, i.e., ‘gatekeepers’, who have an annual turnover of at least €7.5 billion or a market value of €75 billion in the last three years.

Additionally, the ‘gatekeeper’ must have 45 million monthly active end users and at least 10,000 business users in the EU. Therefore, platforms which have a substantial influence on the digital market would be within the remit of the DMA.

Under the DMA, ‘gatekeepers’ will now have to adhere to following obligations:

• Inform the EU Commission of their acquisitions and mergers;
• Ensure functions of their instant messaging services are interoperable;
• Ensure end users can easily uninstall software application(s) from the gatekeeper’s operating system(s);
• Ensure business users have access to their marketing or advertising performance data; and
• Ensure application developers have access to supplementary hardware of smartphones like Near-Field Communication (‘NFC’) chips.

Equally, ‘gatekeepers’ will prohibited from the following activities such as:

• Preventing users from easily uninstalling pre-installed software or applications;
• Preventing or restricting end users from raising any instances of the gatekeeper’s non-compliance with the DMA;
• Signing in users to other services offered by the ‘gatekeeper’ in order to combine personal data (unless the end user has given his or her consent within the meaning of the General Data Protection Regulation); and
• Giving preference to their own services or products compared to those of third parties.

Should a ‘gatekeeper’ fail to comply with its obligations under the DMA, the EU Commission can impose fines of up to 10% of its worldwide turnover from the previous financial year, or in the event of repeated non-compliance, a 20% fine of its worldwide turnover. Further to this, should a ‘gatekeeper’ systematically demonstrate a failure to comply with the DMA, i.e., by failing to comply with the rules at least three times in an eight-year period, the EU Commission can begin a market investigation and, where necessary, enforce behavioural or structural remedies.

It is expected the EU Commission will start to formally identify which organisations will have ‘gatekeeping’ status mid-2023.

To find out more about the DMA, click here