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The New Frontier for the Regulation of the Digital Market Becomes Reality and the Giants of Digital Technology Are Trying to Take Action
In the increasingly digitalized age we live in, the European Union (EU) faces unique challenges in regulating the digital market. A significant response to this challenge is the Digital Markets Act (DMA), a legislative framework proposed by the EU to address anti-competitive practices and establish clear rules for large digital platforms. In parallel, the EU is also working on creating a Gatekeepers List, a list of companies considered particularly dominant and requiring tighter regulation.
The Digital Markets Act is a legislative proposal presented by the European Commission in December 2020. The main objective of the DMA is to ensure a fair and open digital environment, promoting competition and consumer protection. This act aims to regulate the so-called “relevant digital platforms”, which are considered fundamental to the digital economy and, at the same time, potentially capable of exerting significant influence on the market.
The DMA prohibits a number of practices considered anti-competitive, such as self-preferencing of platforms, the use of user data for competitive purposes and blocking of access to data. The act proposes measures to ensure that competing companies and users have access to essential data held by relevant digital platforms. DMA promotes data portability, allowing users to move their data from one platform to another prohibiting blocking practices, such as installing applications and services by default, without the possibility of removal.
The act proposes a tighter surveillance system and harsher sanctions for companies that violate the rules. In parallel with the DMA, the EU is developing the Gatekeepers List with companies deemed “gatekeepers” or “market dominators”, whose impact on the digital market requires particular attention and regulation. A company must have a dominant position in a significant digital market. The company’s business must have a significant impact on the European Union in terms of size or growth.
The company must play a “gatekeeper” role, controlling access to a key digital market and the business must be interconnected with other digital services, creating a significant network effect. Companies included in the list will be subject to tighter regulation, including compliance with DMA rules. Specific bans may be imposed on companies included in the list to prevent anti-competitive behavior. Companies on the list are required to cooperate with regulators and provide relevant information. The list will be subject to periodic review to reflect changes in the digital landscape.
Dominant digital market players, such as Google, Facebook, Amazon and Apple, could be among the main interested parties in the DMA and the Gatekeepers List. The DMA’s proposed restrictions could affect their ability to use user data to further their own services and could require them to open access to essential data to other competitors. Being included on the Gatekeepers List could mean greater regulation for these companies and the possibility of being subject to more severe sanctions if they violate the rules.
The new regulations aim to create a fairer and more open digital environment, providing smaller competitors with a more level playing field. Accessing data from dominant platforms and fostering competition can open up new opportunities for smaller companies, allowing them to compete more effectively with industry giants. However, there is also a risk that regulations could place additional burdens on small businesses, requiring compliance with new rules and procedures.
The Digital Markets Act and the Gatekeepers List represent significant steps towards stricter regulation of the digital market in the European Union. While seeking to address anti-competitive practices and ensure a fairer digital environment, these legislative tools are also sparking discussions and debates on the balance between regulation and innovation. The future of the digital market in Europe will be shaped by how these proposals are implemented and the responses of affected companies and the wider community.
Alessandro Fiorentino