Digital Markets Act to enter into trialogue negotiations

Meanwhile the Council of Ministers adopted its general approach on the DMA on 25 November.

Council general approach

The Council of Ministers made several amendments to the proposal. The Council’s text shortens the deadlines and improves the criteria for the designation of gatekeepers. The Council states that the DMA should include an annex containing a methodology that defines ‘active end users’ and ‘active business users’. Further improvements were made to make the structure and the scope of obligations clearer and more futureproof. The text also contains a new obligation that enhances the right of end users to unsubscribe from core platform services. Provisions on regulatory dialogue were improved to ensure that the discretionary power of the European Commission to engage in this dialogue is used appropriately. To prevent fragmentation of the internal market, the text confirms the European Commission as the sole enforcer of the Regulation. Member states can empower national competition authorities to start investigations into possible infringements and transmit their findings to the European Commission. Germany, France and the Netherlands called for the sharing of enforcement powers between Brussels and national capitals. These countries want to give space to local regulators to pursue their own cases, even if they go further than what is laid down in DMA.

European Parliament position

The European Parliament voted for stronger and centralised enforcement by the European Commission, in cooperation with national authorities. It proposes a European High-Level Group of Digital Regulators in the form of an expert group, consisting of a representative of the Commission, a representative of relevant Union bodies, representatives of National Competent Authorities (“NCAs”) and representatives of other NCAs in specific sectors including data protection, electronic communications and consumer protection authorities. It will be able to issue advice and recommendations. NCAs should support the Commission in monitoring compliance and obligations. Following the position of the Council, NCAs should be able to start an investigation and impose gatekeeper obligations based on national laws, and to attend the Digital Markets Advisory Committee in an expert role. The European Parliament proposes that two or more NCAs may request the Commission to open an investigation on a platform provider. Furthermore, the DMA should ensure adequate arrangements to enable whistleblowers to alert competent authorities. The European Parliament is also a proponent of a stricter gatekeeper designation process with shorter timelines.

In terms of the scope of the DMA, the European Parliament proposes that non-commercial collaborative projects should not be considered as core platforms services. Core platform services should also include online intermediation services like online search engines, operating systems (smart devices, internet of things or embedded digital services in vehicles), online social networking, video sharing platform services, number-independent interpersonal communication services, cloud computing services, virtual assistant services, web browsers, connected TV and online advertising services. With respect to the quantitative thresholds, the parliament proposes an annual turnover of €8 billion instead of €6.5 billion in the last three financial years, €80 instead of €65 billion in terms of market capitalisation in the last three financial years, and 45 million monthly active end-users and 10,000 active business users using at least one core platform service.

The Parliament also proposes new obligations and prohibitions directly applicable to big platforms acting as gatekeepers. The Commission may add new obligations to Articles 5 and 6 of the DMA through delegated acts. Gatekeepers will have to refrain from imposing unfair conditions on businesses and consumers. Additional requirements are proposed on the use of data for targeted or micro-targeted advertising and the interoperability of services, e.g. number-independent interpersonal communications services and social network services. Gatekeepers should refrain from combining personal data except if there is a “clear, explicit, renewed, informed consent” in accordance with the GDPR.

Furthermore, the Parliament proposes that the Commission can restrict gatekeepers from making ‘killer acquisitions’ for a limited period. Gatekeepers would also be obliged to inform the Commission of any intended concentration. Business users, competitors, end-users of the core platform services, as well as their representatives or other persons with a legitimate interest may complain to the NCAs. And last but not least, the European Parliament proposes fines of 4% and up to 20% of the total annual turnover of the gatekeeper.

The Commission’s recently established a Digital Markets Act task force will be responsible for guiding the “trilogue” negotiations in 2022 and the designation of gatekeepers. The trilogue meetings (between the Council, Parliament and Commission) will begin once the Parliament has agreed on its position. European Commissioner Margrethe Vestager aims to have reached consensus by the summer of 2022, with a six-month deadline for entry into force, but that seems ambitious and would be fast by European standards.

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