European Union Digital Markets Act has started

On November 1, 2022, the Digital Markets Act (the “DMA”) came into effect. The DMA introduces new rules for certain central platform services acting as “gatekeepers” in the digital sector (including search engines, social networks, online advertising services, cloud computing, video sharing, messaging services, operating systems and online intermediation services). The DMA also aims to prevent these platforms from imposing unfair conditions on businesses and consumers, and to ensure the openness of important digital services.

To be considered a “custodian” and therefore subject to the DMA, a company must:

  • Have a certain annual turnover in the European Economic Area (“EEA”) and provide basic platform service in at least three EU member states;

  • Provide core platform service to over 45 million monthly active end users established or located in the EU and over 10,000 annual active business users in the EU; and

  • Have a rooted and lasting position in the EU. This is presumed to be the case if a company fulfills the second criterion described above in each of the last three financial years.

The DMA contains a list of requirements that gatekeepers must comply with to ensure fair and open digital markets, including:

  • Allow end users to install third-party applications or application stores that use or interact with the gatekeeper’s operating system;

  • Allow end users to unsubscribe from core gatekeeper platform services as easily as they subscribe to them;

  • Providing businesses advertising on a gatekeeper’s platform with access to gatekeeper’s performance measurement tools and information necessary to enable advertisers and publishers to conduct their own independent verification of their advertisements hosted by the gatekeeper;

  • A ban on using a business user’s data if the gatekeeper competes with the business user on the gatekeeper’s own platform;

  • No higher ranking of Gatekeeper’s own products or services than those of third parties hosted on Gatekeeper’s own platform; and

  • A ban on tracking end users outside of the gatekeepers core platform service for the purpose of targeted advertising without obtaining proper consent.

Next steps

The DMA will become applicable in six months, starting May 2, 2023. Businesses will have until July 3, 2023 to register their core platform services with the European Commission if the business believes it meets the thresholds. as the “guardian” of the DMA. Following this registration, the European Commission will assess whether the company meets the ‘custodian’ threshold and, if so, appoint the company as a custodian. Following this designation, a gatekeeper will have until March 6, 2024 to comply with DMA requirements.

The European Commission will publish implementing regulations containing provisions on the procedural aspects of registration with the European Commission.

Read the official text of the DMA.

Read questions and answers about DMA.

Read the European Commission’s press release on AMD.

Copyright © 2022, Hunter Andrews Kurth LLP. All rights reserved.National Law Review, Volume XII, Number 315