It has been more than three months since the European Commission adopted its proposals for the Digital Markets Act ("DMA"). As we have reported ("Gatekeepers and the Digital Markets Act – CEE focused in-depth review" & "(Re)Shaping the digital EU: The European Commission's legislative proposal to manage digitalisation is finally here"), the purpose of the DMA is to allow the Commission to address competition concerns in digital markets more effectively than under existing antitrust rules. To achieve this, the DMA would impose far-reaching obligations on so-called "gatekeeper" platforms. Failure to comply could lead to fines as high as 10 % of the infringing company's annual revenue. The DMA also proposes structural measures as a last resort to remedy concerns.
Unsurprisingly, the DMA has sparked heated debate. Major US tech firms would all fall under this classification and have expressed concerns. The DMA is currently awaiting formal presentation to the European Parliament, which will debate the proposal this year. Some members of the European Parliament have already warned against watering down the proposals. But these measures will run up against divergent interests among EU Member States and could still undergo significant changes. While France and the Netherlands support Brussels' ambitions, Ireland and other Member States with more vibrant tech sectors may be more sceptical of the current proposals. Observers expect the process to take at least 12 to 18 months.
Meanwhile, the EU Commission, besides presenting and defending its proposal at several instances, including before the European Parliament's Internal Market Committee (see here) and Industry, Research and Energy Committee, has published a report from a panel of economic experts that backs the EC's approach to defining a gatekeeper and the imposition of behavioural obligations. The panel
suggests, however, some fine tuning, which echoes concerns that the DMA might disproportionally limit freedom to conduct business through "black letter law" without proper rights of defence.
Consequently, the report proposes tweaks to the EU Commission's approach to regulation, recommending that there should be a blacklist of forbidden behaviours, with exceptions only in very significant circumstances, and a grey list of practices that are in principle considered problematic but for which justification is possible, with the tech company bearing the burden of proof. For example, the report proposes that self-preferencing should be on the blacklist, while tying and bundling should be on the grey list.
Besides the alleged disproportionate limitation of fundamental rights, the DMA was criticised for the limited role it affords national competition authorities in the enforcement of obligations on gatekeepers, as well as the limitations on interoperability requirements, which need to be balanced against possible negative effects on innovation.
It is fair to say that the heated debate over how, if at all, to regulate big tech will continue in the months to come, inside and outside the European Parliament.