The EU will limit the power of large online platforms with essential services such as Google, Apple, Facebook, Amazon, Microsoft, Airbnb and Booking.com. On Monday, the member states finally passed the Digital Markets Act (DMA) in the Council of Ministers. The regulation aims to ensure that there is a level playing field on the internet with clear rules for large online platforms with a gatekeeper function (“gatekeeper”) and that internet giants do not abuse their position.
For whom the DMA affects
The EU legislative bodies have defined digital platforms as gatekeepers that have over 45 million active end-users per month and have had a turnover of at least 7.5 billion euros in each of the past three financial years. Corresponding messenger providers such as WhatsApp, Facebook or Apple with iMessage must, according to the specifications, ensure that the basic functions of their services are interoperable. They should enable their users to exchange chats and send voice messages or files via the apps.
Security functions should not be impaired: According to the final text, the level of security offered by a “gatekeeper” – possibly including end-to-end encryption – must be retained for interoperable services. The Signal Foundation, which operates the messenger of the same name, still sees the requirement as a potential threat to user privacy. Smaller providers such as Signal or Threema would first have to apply to WhatsApp & Co. for basic functionalities to be interconnected.
New specifications for apps and software
Gatekeepers are no longer allowed to pre-install certain apps or software and prevent users from simply uninstalling these programs. The installation of important applications such as browsers can lawfully no longer be prescribed as standard with the installation of the operating system. Gatekeeper may only process personal data for the purposes for which the user provided it. Payment options are not limited to your own methods.
Affected platform operators must ensure that deregistering from central services is just as easy as registering. They may not display their own products or services as preferred in recommendation lists or search results. Business users must be given access to marketing or advertising performance data on the platform. In addition, there is the obligation to inform the EU Commission about takeovers and mergers.
When does the law come into force?
After the EU Parliament had previously approved the DMA, the law on digital markets is now considered to be officially adopted. It comes into force six months after publication in the EU Official Journal and as a regulation does not have to be implemented separately in the member states. The commission then has 45 days to inform corporations that it has classified them as gatekeepers.
Those affected must then comply with the regulations within six months. Violations are subject to fines of up to 10 percent of total worldwide sales, and up to 20 percent in repeated cases. “With this, the EU will change the online space worldwide,” said Ivan Bartoš, Czech Vice Prime Minister for Digitization, on behalf of the Council Presidency. The power of gatekeepers is growing “to an extent that is having a negative impact on competition”. The DMA will therefore provide new opportunities for small companies. The Council is expected to finally adopt the parallel Digital Services Act (DSA) aka Platform Basic Law in September.
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