Don’t ignore platforms ‘combining services’ in Digital Markets Act, Netherlands says

The Digital Markets Act proposals will see so-called certain large platforms prohibited from engaging in practices deemed to be of the detriment to “contestability and fairness” in online markets.

The DMA proposals will see so-called certain large platforms prohibited from engaging in practices deemed to be of the detriment to “contestability and fairness” in online markets. [Shutterstock]

More attention should be paid to whether platforms offer an ‘ecosystem’ of many different services in terms of designating them as so-called ‘gatekeeper platforms’ and therefore coming under the scope of the proposed Digital Markets Act (DMA) rules, says a position paper published by the Dutch government.

The DMA proposals will see so-called certain large platforms prohibited from engaging in practices deemed to be of the detriment to “contestability and fairness” in online markets. Fines for non-compliance with the rules have been pitched at a maximum of 10% of a company’s annual worldwide turnover.

The plans, put forward by the European Commission in mid-December, pitch the criteria for designating the ‘gatekeeper platforms’ to come under the scope as those with at least 45 million monthly EU users and more than 10,000 annual business users.

In addition, a company will have had to have generated at least €6.5 billion across the European Economic Area over the last three years or have a market value of at least €65 billion in the last financial year – with services available in at least three member states.

For the Dutch, however, there needs to be more scrutiny on how certain platforms may have obtained a ‘gatekeeper’ position through an amalgamation of different services.

“The government believes that, when determining whether a platform has a gatekeeper position, it is important to bear in mind that platforms can acquire such a position by combining different services,” states the position paper published by the Dutch government on Wednesday (17 February) and transmitted to its national parliament.

The document adds that the government will press the European Commission to clarify the extent to which the “creation of an ecosystem is taken into account when determining whether a platform has a gatekeeper role,” adding that if necessary, the Dutch will push for a “designation procedure in which more account is taken of the role of ecosystems.”

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More scrutiny of mergers and acquisitions

In a similar field, while the Dutch are aware of obligations for gatekeepers to report all mergers and acquisitions in digital markets to the Commission, it would also like to see acquisitions by major tech companies are assessed by the Commission more frequently.

“In order to achieve the same objective through the provision in the DMA, the Dutch government will push for an obligation for the commission to scrutinize mergers and acquisitions by gatekeeping platforms once they have been reported,” the text states.

It adds that it feels the reporting obligation set out in the DMA is online limited to acquisitions of digital services and this should potentially be broadened to all forms of mergers and acquisitions by gatekeeping platforms.

One major acquisition that recently provoked interest from stakeholders was Google’s buyout of fitness tracker firm Fitbit.

After EU antitrust regulators approved the acquisition just before the end of last year, stakeholders were quick to raise concern. Certain high-profile names including Professor Shoshana Zuboff, author of ‘The Age of Surveillance Capitalism’, told members of the European Parliament that the decision to approve the acquisition “should be reconsidered immediately and never repeated”.

Commission vies to 'put order into chaos' with new digital crackdown

Online platform giants will be forced to abide by a broad range of obligations as part of ambitious new plans laid out by the European Commission in its Digital Markets Act (DMA) and Digital Services Act (DSA) on Tuesday (15 December).

‘Active end-user’ dilemma

Elsewhere, the paper from the Dutch this week also calls for quantitative criteria for designating so-called ‘gatekeeper platforms’ as part of proposed rules under the EU’s Digital Markets Act (DMA) to be clarified and also avoid harming smaller platforms.

“It is unclear, for instance, how turnover and the number of active users should be measured. More clarity is needed in this regard,” the paper notes.

On the point of ‘active users’ of certain platforms, there have many in Brussels and beyond that have raised the issue of the difficulty of identifying such a ‘user’ of online services, particularly as many such services in the platform economy to do involve a direct financial transaction between the user and the service provider.

This was a point in particular also raised by Amersham-based accommodation platform, “The proposal refers to ‘active monthly end-users.’ What exactly does this mean? This will be something different for a social network, a search engine, and an app-store,” a recent blog-post from the company read.

Meanwhile, the Dutch government has also outlined its position on the Digital Services Act (DSA) this week.

As part of the Commission’s proposal for the DSA, platforms will face the prospect of billions of euros in fines unless they abide by new rules across fields including advertising transparency, illegal content removal, and data access.

In broad support of the EU executive’s plans, the Dutch government also notes that it believes smaller intermediary platforms should face the least restrictive ramifications, but interestingly, a fine balance needs to be struck into ensuring that certain illegal practices online simply don’t migrate to smaller platforms as a result.

“The government recognizes that excluding micro-companies and small companies from the obligations for online platforms serves to limit the administrative burden on the business community and avoids making the entry barriers too high,” the paper states.

“However, this should not undermine the objectives of the proposal, for example by causing illegal content and activities to move to smaller intermediaries. The government will continue to pay attention to this.”

[Edited by Zoran Radosavljevic]

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