A strong political will from Parliament and Council saw a quick approval of the DMA. Its ultimate success will depend on its implementation and enforcement
A regulation approved in record time: EU institutions found an agreement on the Digital Markets Act (DMA) on 24 March, setting out a framework for ex-ante regulation of digital markets for the first time. Considering the standard of the EU legislative process, the DMA was approved in record time (15 months after the EC’s initial proposal). This is a sign of strong alignment between the European Council, Parliament and Commission. By comparison, previous important regulations for the digital sector took a lot longer (such as the four years to approve the GDPR). Even a popular initiative like the Roaming Regulation took two years, and wasn’t without stumbling blocks to overcome.
The EU Parliament secured important amendments to the original proposal: The final agreement takes on board many of the changes proposed by the Parliament. The “core platform” services in which gatekeepers can be designated now include virtual assistants and web browsers, on top of the eight categories originally designated. The threshold for the designation of a company as a gatekeeper is a market value of €75bn or an annual EEA turnover of €6.5bn (closer to the Parliament’s proposals of €80bn market value or €8bn turnover, than to the initial €65bn or €6.5bn). Parliament also successfully managed to raise the fines for repeated infringement from 10% to 20% of a company’s annual turnover and to introduce a temporary ban on acquisitions in cases of systematic non-compliance. The EC’s original text made no changes to existing merger rules, except for the introduction of a notification requirement.
Practical implementation will be a significant challenge: Both Parliament and Council will now have to formally approve the regulation, which is expected to happen in the coming weeks. The rules will apply six months after entry into force, and that’s when the European Commission will have to rise to the challenge. For the first time, the EC will exercise powers similar to those of a regulatory authority in designating gatekeepers and impose remedies on them. For that to happen, it will need to scale up its capabilities very quickly, in a sector that is fast-moving and in which regulators are still finding their feet. It will also have to build good relationships with national competition authorities, some of which will be particularly keen to get involved (such as Germany’s Bundeskartellamt which has been proactive in thinking up its own rules for big tech). Last minute amendments also saw interoperability requirements included within the regulation will prove particularly challenging to implement and will no doubt continue to be the subject of much debate – particularly given concerns around how they will work given encryption protocols. The hard part is still very much yet to come.
Source: https://ec.europa.eu/commission/presscorner/detail/en/IP_22_1978
