Global Digital Markets Regulation


INSIGHT
Published
Jan 24th '22
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Digital markets potentially face new regulation to deliver greater competition and innovation for the use of data, while protecting consumers’ rights. Social networks, search engines and eCommerce sites are just some of the digital platforms that will likely be most affected by these new potential Digital Markets Regulations. However, companies that act as market “gatekeepers” in the life sciences, pharmaceuticals and automotive sectors may also be impacted.

 

These anticipated new regulations will complement existing antitrust, data protection and electronic communications laws to further protect consumers, and ultimately ensure digital markets players act responsibly and are accountable.

 

Key issues that regulators around the globe are looking to address with new ex ante regulations include:

 

  • Economic dependency on a few companies who play a “gatekeeper” role in the market, through exclusive use of valuable data
  • Interoperability of data systems
  • Data mobility and portability
  • Transparency and fairness in customer contracts.

 

Who are the gatekeepers?

The Digital Markets Act (DMA) establishes a set of narrowly defined objective criteria for qualifying a large online platform as a so-called “gatekeeper”. This allows the DMA to remain well targeted to the problem that it aims to tackle as regards large, systemic online platforms.

 

These criteria will be met if a company:

 

  • has a strong economic position, significant impact on the internal market and is active in multiple EU countries
  • has a strong intermediation position, meaning that it links a large user base to a large number of businesses
  • has (or is about to have) an entrenched and durable position in the market, meaning that it is stable over time

 

What are the benefits of the Digital Markets Act?

 

  • Business users who depend on gatekeepers to offer their services in the single market will have a fairer business environment.
  • Innovators and technology start-ups will have new opportunities to compete and innovate in the online platform environment without having to comply with unfair terms and conditions limiting their development.
  • Consumers will have more and better services to choose from, more opportunities to switch their provider if they wish so, direct access to services, and fairer prices.
  • Gatekeepers will keep all opportunities to innovate and offer new services. They will simply not be allowed to use unfair practices towards the business users and customers that depend on them to gain an undue advantage.

 

What does this mean for gatekeepers?

The new rules will establish obligations for gatekeepers, “do’s” and “don’ts” they must comply with in their daily operations.

 

Examples of the “do’s” – Gatekeeper platforms will have to:

 

allow third parties to inter-operate with the gatekeeper’s own services in certain specific situations
allow their business users to access the data that they generate in their use of the gatekeeper’s platform
provide companies advertising on their platform with the tools and information necessary for advertisers and publishers to carry out their own independent verification of their advertisements hosted by the gatekeeper
allow their business users to promote their offer and conclude contracts with their customers outside the gatekeeper’s platform

 

 

Example of the “don’ts” – Gatekeeper platforms may no longer:

 

treat services and products offered by the gatekeeper itself more favourably in ranking than similar services or products offered by third parties on the gatekeeper’s platform
prevent consumers from linking up to businesses outside their platforms
prevent users from un-installing any pre-installed software or app if they wish so

 

 

What will be the consequences of non-compliance?

In case of systematic infringements of the DMA obligations by gatekeepers, additional remedies may be imposed on the gatekeepers after a market investigation. Such remedies will need to be proportionate to the offence committed. If necessary and as a last resort option, non-financial remedies can be imposed. These can include behavioural and structural remedies, e.g. the divestiture of (parts of) a business

 

 

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