July 18, 2022
The EU Council has approved the ‘Digital Markets Act’ that provides new rules for large online platforms to prevent abuse of their market position.
The EU Council has approved new rules for large online platforms (“gatekeepers”) to prevent abuse of their market position through the Digital Markets Act (DMA).
The EU Council said of the DMA: “The DMA ensures a digital level playing field that establishes clear rights and rules for large online platforms (‘gatekeepers’) and makes sure that none of them abuses their position. Regulating the digital market at EU level will create a fair and competitive digital environment, allowing companies and consumers to benefit from digital opportunities.”
The DMA will require Gatekeepers to ensure that unsubscribing from core platform services is just as easy as subscribing. At the same time, guaranteeing that the basic functionalities of instant messaging services are interoperable, i.e. enable users to exchange messages, and send voice messages or files across messaging apps. Business users must have access to their marketing or advertising performance data on the platform.
Gatekeepers must also inform the European Commission of their acquisitions and mergers.
The DMA will prevent gatekeepers from ranking their own products or services higher than those of others (self-preferencing). Or pre-installing certain apps or software, or prevent users from easily un-installing these apps or software. The DMA also ends the requirement that the most critical software (e.g. web browsers) be installed by default when installing an operating system.
The DMA will also stop gatekeepers from preventing developers from using third-party payment platforms for app sales or reusing private data collected during a service for another service.
If a large online platform is identified as a gatekeeper, it must comply with the DMA rules within six months.
There are tough penalties for gatekeepers who violate the DMA. For a first offence, the maximum fine could be up to 10% of its total worldwide turnover. For a second office, the maximum fine increases to 20% of the gatekeepers’ worldwide turnover. Harsher penalties for gatekeepers that break the DMA rules include a possible market investigation and, if necessary, imposing behavioural or structural remedies.
Categories : World Focus