The rise of platforms such as Amazon, Google and Facebook has revolutionised the way in which consumers buy products and sellers offer their products for sale. The downside is that companies have become dependent on private parties that control the access to and conditions of a market. In response, the European Union has adopted the Digital Markets Act (“DMA”), which regulates these ‘gatekeepers’.
The DMA entered into force on 1 November 2022 and the related implementation process is well underway. We wrote blogs on this subject in the past (see here, here and here). The DMA rules have in fact applied since 2 May 2023. In this blog, we discuss:
- which implementation steps may still be expected;
- which companies are likely to be designated as gatekeepers; and
- how companies operating on gatekeeper platforms may benefit from the DMA.
DMA implementation well underway
These past six months have been spent steering the implementation of the DMA in the right direction. During this period, the European Commission (“the Commission”) drew up the DMA Implementing Regulation, which sets procedural rules regarding the designation of gatekeepers (more on which below). The Commission also organised several workshops, where stakeholders could raise specific issues and questions regarding the implementation of the DMA. These workshops covered the prohibition of self-preferencing, interoperability between messaging services, and the freedom of choice regarding app stores. A workshop on data-related rules from the DMA, including those related to data processing for advertisements and for combining data, took place on 5 May 2023.
The material from the workshop on self-preferencing demonstrates, among other things, that a robust discussion took place on Google’s One Box. Google allegedly uses this One Box to unfairly rank its results for product sales, vacancies, holidays and flights above those of other providers. Parties that participated in this workshop included Expedia, eDreams ODIGEO, Jobindex, Yelp and Kelkoo, with Expedia arguing that Google allegedly favours its own ‘travel vertical’ (the hotel booking module) and Kelkoo arguing in a similar vein that Google’s own product comparison tool at the top of search results disadvantages competing price comparison sites.
The gatekeeper designation process has now also begun. As of 2 May 2023 potential gatekeepers have two months to decide for themselves whether they offer what is known as ‘core platform services’ and may be classified as gatekeepers. The cumulative conditions to be designated as a gatekeeper (Article 3 DMA) are set out in this blog. If these conditions are met, potential gatekeepers will have to notify the Commission within two months (Article 3(3) DMA).
Once a potential gatekeeper has notified the Commission, the Commission must determine within 45 working days whether the company is indeed a gatekeeper. The first gatekeepers are expected to be designated around early September. As from that designation moment, each gatekeeper has six months in which to comply with the DMA obligations (Article 3(10) DMA). This means that companies (and consumers) using the relevant platforms can actually benefit from the DMA rules around March 2024.
Which platforms will be designated as gatekeepers? There is still a great deal of speculation on this point. In the DMA Impact Assessment, the Commission hinted that 10 to 15 companies are believed to be gatekeepers. The large tech companies, such as Google, Apple, Meta (Facebook), Amazon and Microsoft (GAFAM) are expected to be designated as gatekeepers. The German Minister of Economy’s Priorities Paper also mentions Booking.com and Twitter as possible gatekeepers.
Importantly, companies that do not meet the quantitative requirements may also be designated as gatekeepers. This is subject to the condition that the platform in question is “likely to achieve an established and sustainable position” in the market. This implies that the Commission will focus not only on the GAFAM companies. Several other big tech companies have already been mentioned in the legislative process, including SAP, Oracle, Airbnb, Zoom, Salesforce, PayPal, Zalando, Yahoo, Vivendi, Spotify and Booking.com.
From September 2023, it will be clearer which companies the Commission regards as gatekeepers. It is conceivable that companies designated as gatekeepers will challenge that designation in court in order to avoid the DMA obligations, which will in any event give rise to delays.
Companies may report concerns about DMA non-compliance to ACM
In the original DMA bill, the Commission was designated as the only enforcing authority. But national competition authorities have successfully lobbied for a greater role in the enforcement of the DMA (see also this blog). As a result, the Netherlands Authority for Consumers and Markets (“ACM”) will be designated as the national regulator of the DMA in the Netherlands. Companies will therefore no longer have to turn to Brussels, but may also complain to ACM about poor compliance with the DMA by gatekeepers. ACM will soon be given the following powers:
- ACM may investigate gatekeeper conduct on its own initiative (Article 38(7) DMA). As part of such an investigation, ACM may also decide to carry out (unannounced) dawn raids. The results of the investigation must then be shared with the Commission, which then decides whether it sees reason for a further investigation and, if necessary, enforcement action against the gatekeeper in question.
- Individual Member States may request the Commission to open a market investigation into a gatekeeper’s non-compliance with DMA obligations (Article 41(2) DMA).
- Three or more Member States may jointly request the Commission to open a market investigation to designate a platform company as a gatekeeper (Article 41(1) DMA).
The Commission will remain exclusively authorised to impose sanctions for violations of the DMA. However, national competition authorities such as ACM play an important role in monitoring and investigating the practices of gatekeepers. ACM expects to launch its own investigations into DMA compliance between one and three times a year. Signals or enforcement requests to ACM by companies that are inconvenienced by gatekeepers may be an important trigger in this regard. It may therefore be worthwhile for companies (and consumers) to apply to ACM if they believe the DMA is being violated.
Companies may also apply directly to the Dutch courts
Companies that believe they are disadvantaged by failure to comply with the DMA may also summon a gatekeeper to appear before a national court, since the DMA rules also apply directly in the relationship between gatekeepers and companies. A court may force a gatekeeper, for instance, to comply with the DMA or to pay damages on the grounds of a wrongful act. This was recently confirmed by a Commission policy officer. The Dutch explanatory memorandum to the Digital Markets Regulation Implementation Act also corroborates this impression.
When assessing such claims, national courts may ask the Commission for help as a kind of amicus curiae (‘friend of the court’: see Article 38 DMA and Article 5 of the Digital Markets Regulation Implementation Act). Courts also may not issue rulings that conflict with DMA decisions of the Commission, such as a decision that a certain practice was in violation of the DMA.
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