DMA: significant additions made it into the final text

The Digital Markets Act (DMA) will only target companies that have a dominant position in key digital markets. [Vector Image Plus/Shutterstock]

The long-waited final text for the Digital Markets Act, seen by EURACTIV, contains some unexpected last-minute changes.

The EU co-legislators reached an agreement on the Digital Markets Act (DMA) on 24 March. Since then, stakeholders have been trying to get hold of the final text, fine-tuned in the utmost secrecy until it was finally circulated on Thursday (14 April).

The text will likely be presented to the Council’s competition working party on 28 April and approved by the EU ambassadors at the Committee of Permanent Representatives (COREPER) on 4 May.

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Preamble

The text’s preamble was changed to clarify the meaning of the legal obligations and make a legal challenge more difficult.

The text now clearly states that the DMA is intended to ensure the contestability of all online services. A general explanation of contestability and fairness has also been added.

Contestability can be harmed even by an oligopoly of gatekeepers. In cases where competition between platforms is not possible in the short term, competition within the dominant platform should be ensured.

Unfairness is defined as “an imbalance between the rights and obligations of business users where the gatekeeper obtains a disproportionate advantage.” Importantly, this concept does not exclude services free of charge, such as search results.

Moreover, gatekeepers cannot exclude or discriminate against businesses, an essential specification in light of the new obligations on default settings, allowing users to choose their search engines, virtual assistants and web browsers via a choice screen.

Default settings, sideloading, third-party apps

The document states that users should be able to uninstall any apps that are not essential to the functioning of the operating system or device.

On sideloading, new wording has been added to ensure that third-party apps and app stores can ask users to become their default setting. The Council’s language on allowing gatekeepers to apply ‘duly justified’ security requirements to the third-party apps has been added.

Similarly, the gatekeepers will have to ensure its hardware and software are interoperable with third parties. Still, it could take the strictly necessary measures to ensure that providing this interoperability does not damage software and device.

FRAND

The text mandates that gatekeepers’ app stores, search engines, and social media have to respect fair, reasonable and non-discriminatory (FRAND) access to their services for business users. A ‘future-proof’ clause has been added to address unfair practices that are not yet existent but might develop in the future.

The gatekeeper would have to publish general conditions of access to explain how the FRAND terms apply to their platforms, including an alternative dispute settlement mechanism. The EU executive would check that the general conditions comply with the regulation.

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Data provisions

An entirely new requirement prevents gatekeepers from using personal data from users that are using the service provided by a third party when that third-party service is using the gatekeeper’s platform.

The preamble explains that this measure is meant to prevent Google and Facebook from tracking users who have denied their consent when they visit websites that are part of their ad networks. The regulation only allows requesting consent to process personal data once per year.

Advertisers will be able to access both aggregated and non-aggregated data for the ads they run. The data must be provided so advertisers can analyse it with their tools.

Interoperability of messaging services

The final draft confirms that the interoperability requirements have been divided into three steps. Upon designation, the gatekeeper will need to ensure that two individuals can exchange encrypted text messages, images, voices messages, videos and files.

Within two years, the same features should be interoperable for group chats. Interoperability will cover voice and video calls between individuals and groups by the fourth year. After receiving an interoperability request, the gatekeeper must provide interoperability within three months.

The final draft gives stronger powers to the Commission to determine how interoperability should work. The EU executive will be able to delay the above timeframe in exceptional circumstances and exempt a gatekeeper from these obligations if it is in the public interest.

Based on a market investigation, the Commission could impose new obligations, add or remove features or further specify how interoperability should work via secondary legislation.

Anti-bundling and circumvention

The text removed any reference to ‘ancillary’ supporting services. Thus, the anti-bundling measures, to prevent gatekeepers from tying different services together, only refer to identification systems, payment systems, and web browser engines.

A change to the text preamble now requires business users to only contact an end-user once the gatekeeper has been directly or indirectly remunerated. That is meant to avoid business users’ ‘free ride’ marketplaces like Booking to conduct transactions with the customer directly.

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Third-party involvement

The text requires the Commission to facilitate the involvement of third parties when engaging in the regulatory dialogue and the investigations on systemic non-compliance.

Timeline

The DMA is expected to be adopted next month, meaning it will enter into force in October 2022. Following that, it will take six months to apply, taking up to April 2023. The designation process will start, which might take up to the end of summer 2023. From there, the regulatory dialogue would formally start. Finally, the compliance process will begin around the first quarter of 2024.

[Edited by Nathalie Weatherald]

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