DMA: EU lawmakers ready to trade digital governance for tighter obligations

The Digital Markets Act rapporteur Andreas Schwab at the European Parliament's plenary session in December, Strasbourg. [Philippe BUISSIN/European Parliament]

EU lawmakers are preparing to make concessions on the governance of the Digital Markets Act to obtain more ambitious obligations for gatekeepers, according to an internal note seen by EURACTIV.

The document outlined the negotiating strategy of the EU Parliament’s lead negotiator, Andreas Schwab of the conservative European People’s Party.

It was circulated ahead of a meeting with the other political groups due on Thursday (24 March) to prepare for what might be the last political trilogue – talks between the European Parliament, Council and Commission – on the same day.

The note divided the discussion into four clusters: enforcement, future-proofing and scope, governance, obligations. The document defined a strategy for reaching a compromise on each cluster, requesting feedback where more room of manoeuvre might be needed.

DSA: French Presidency pitches compromise on dark patterns, minors, compensation

Following the third political trilogue on the Digital Services Act (DSA) on Tuesday, the French Presidency prepared a compromise text on dark patterns, protection of minors and compensations, dated Wednesday (16 March).

Enforcement

The rapporteur suggested supporting the Commission’s proposal to differentiate between emerging and entrenched gatekeepers. However, the list of obligations for emerging gatekeepers is still being discussed among lawmakers.

On systematic non-compliance, the note proposed to accept the compromise on the temporary ban for killer acquisitions, the possibility to test remedies to optimise their effectiveness, and the involvement of third parties with a legitimate interest.

“The rapporteur engages to defend that the Commission should be able to decide on a case by case basis which behaviour (structural or behavioural) is proportionate to the infringement,” the note added.

For the definition of systematic non-compliance, the Parliament proposed lowering the number of infringements from three to two and extending the timeframe from five to ten years. The rapporteur suggested remaining flexible on the number of infringement procedures but insisted on the period.

EU legislators seek a way out of the impasse in DMA negotiations

Little progress was made in the second political trilogue on the Digital Markets Act on Thursday (4 February), but a breakthrough might soon be found by linking the negotiations with the Digital Services Act.

Scope

Schwab pitched exchanging concessions on future-proofing to obtain the Parliament’s text regarding core platform services and the quantitative thresholds that will determine which platforms will be covered by the regulation.

“The rapporteur proposes to insist on the inclusion of virtual assistants and browsers into the list of CPSs while ensuring that a recital would specify that connected TVs fall under the definition of operating systems,” the note said.

Since the beginning, Schwab pushed for raising the market capitalisation and turnover thresholds.

According to the accompanying note requesting an updated mandate to COREPER – a committee of EU27 ambassadors in Brussels – leaked by Contexte, the French EU Council Presidency proposed to ‘update’ these thresholds based on the evolution of the market since the publication of the proposal.

On the definition of users, the rapporteur proposed adopting the compromise text on online intermediation services and the reference to outlier figures. The note requested feedback on deleting the adjective ‘active’ from the definition of users in exchange for concessions on the scope and enforcement.

EU parliament adopts regulation targeting internet giants

EU lawmakers adopted their version of the Digital Markets Act (DMA) in a plenary vote on Wednesday (15 December), formalizing their mandate to enter interinstitutional negotiations on this key piece of digital legislation with the European Council and Commission.

Governance

“The rapporteur proposes to seek a broad compromise package with the Council on the governance provisions in exchange for central elements in the obligations in Articles 5 and 6,” the document said.

In particular, if the concessions on the obligations are “sufficiently good”, Schwab is willing to give away the Commission’s power to veto a national competition decision that contradicts the DMA or a decision at the EU level, a red line for several EU countries, including Germany.

Additional concessions would include endorsing the Council’s text on the role of national authorities, national courts and the compromise on the High-Level Group, an independent body that includes national and EU officials, as well as industry representatives and experts.

The rapporteur proposed to signal flexibility on expanding the role for comitology, the process to adopt secondary legislation.

Moreover, the MEPs seem open to accepting the Council’s provisions on requesting market investigations.

EU ambassadors approve 'general approach' to Digital Markets Act

Ambassadors from the 27-member European Union unanimously adopted their “general approach” to the DMA on Wednesday (10 November), bringing several modifications to the European Commission’s proposal to rein in the dominance of big players on the EU’s digital market.

Obligations

The chapter on the obligations is possibly the most important for MEPs, and there, the rapporteur “engages to defend the Parliament’s mandate,” the note said.

The MEPs introduced tighter restrictions for gatekeepers to cross-use data from different services. The rapporteur proposed to accept the compromise text and delete the Parliament’s new article specifically meant to limit data combining for targeted ads.

On default settings, the rapporteur proposed keeping the article under the list of additional obligations (Art. 6) instead of mandatory obligations (Art. 5) and asked for the other groups’ feedback on the compromise text.

According to the Council’s document, the French Presidency proposed mandatory choice screens for virtual assistants, web browsers and operating systems.

Schwab is also seeking feedback on security provisions related to sideloading, removing the restriction of only installing apps from the official app store, and vertical interoperability, mandating free of charge interoperability with the gatekeepers’ hardware and software.

The leading MEP asked his counterparts for feedback on the Commission’s proposal on interoperability. The Presidency indicated to other member states that it is only willing to accept messaging services’ interoperability “if necessary”.

The rapporteur plans to propose a compromise on the provisions regarding fair, reasonable and non-discriminatory conditions (FRAND), asking for potential margins for a settlement from his colleagues.

The Council opposed extending FRAND terms from the app stores to all core platform services as the MEPs requested, but a more limited extension might be discussed.

An EU diplomat told EURACTIV that the issues of interoperability and FRAND might prevent a final agreement from being reached on Thursday.

Final compromise

The French Presidency has been working toward reaching a final compromise in the trilogue on 24 March by requesting an updated mandate from EU ambassadors the day before.

However, one of the final points of the Parliament’s document is the delegation of work to the technical level, indicating that some work might still be needed to finalise the agreement.

The initial timeline included a ‘fall-back’ trilogue on 5 April in Strasbourg. However, French officials are under strict policy not to travel as of 1 April due to the upcoming French presidential elections on 10 April.

[Edited by Zoran Radosavljevic] 

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