Following a public consultation, the Commission has now published its proposals for a new Digital Markets Act.

The Commission says that the proposed Act addresses the negative consequences arising from certain behaviours by platforms acting as digital “gatekeepers” to the single market. These are platforms that have a significant impact on the internal market, serve as an important gateway for business users to reach their customers, and which enjoy, or will foreseeably enjoy, an entrenched and durable position which can give them the power to act as private rule-makers and to function as bottlenecks between businesses and consumers. Examples of unfair business practices resulting from the position of such platforms include the unfair use of data from businesses operating on these platforms, or situations where users are locked in to a particular service and have limited options for switching to another one.

The Digital Markets Act builds on the Platform-to-Business Regulation (2019/1150/EU), as well as on the findings of the EU Observatory on the Online Platform Economy, which is made up of Commission officials and an expert group and monitors and analyses the online platform economy, and on the Commission’s extensive experience in dealing with online markets through competition law enforcement. It sets out harmonised rules defining and prohibiting unfair practices by gatekeepers, and providing an enforcement mechanism based on market investigations. The same mechanism will ensure that the obligations set out in the Regulation are kept up to date in the constantly evolving digital reality.

The Digital Markets Act would:

• apply only to major providers of the core platform services most prone to unfair practices, such as search engines, social networks or online intermediation services, which meet the objective legislative criteria to be designated as gatekeepers;
• define quantitative thresholds as a basis to identify presumed gatekeepers; the Commission would also have powers to designate companies as gatekeepers following a market investigation;
• prohibit a number of practices which are clearly unfair, such as blocking users from un-installing any pre-installed software or apps;
• require gatekeepers to proactively put in place certain measures, such as targeted measures allowing the software of third parties to function properly and interoperate with their own services;
• impose sanctions for non-compliance, which could include fines of up to 10% of the gatekeeper’s worldwide turnover, to ensure the effectiveness of the new rules; for recurrent infringers these sanctions may also involve the obligation to take structural measures, potentially extending to divestiture of certain businesses, where no other equally effective alternative measure is available to ensure compliance; and
• allow the Commission to carry out targeted market investigations to assess whether new gatekeeper practices and services need to be added to these rules, in order to ensure that the new gatekeeper rules keep up with the fast pace of digital markets.

The European Parliament and the Member States, through the Council, will discuss the Commission’s proposals in the ordinary legislative procedure. If adopted, the final text will be directly applicable across the EU. To access the proposals, including a Questions and Answer document, a Facts Page and the results of the consultation, click here.