Digital Markets Act (DMA) Approval in the EU

The Digital Markets Act: A New Era for EU Tech Regulation

The Digital Markets Act (DMA) was approved on July 18, 2022, and will be effective beginning October 2022.

What is the Digital Markets Act (DMA)?

The Act imposes new rules on European big-tech companies including social media, online marketplaces, online search engines, app stores, virtual assistants, certain messaging services, web browsers, and other online platforms. The Act gave the European Commission (EC) the enforcement powers to impose hefty fines and other remedies for non-compliance.

Gatekeepers: The Targets of the DMA

Gatekeepers are companies that offer “Core Platform Services” that have a significant impact on the EU market, with revenue over €7.5 billion in each of the last three financial years and at least 45 million monthly active users and more than 10,000 active business users, among others. The EC can designate gatekeepers and impose obligations on companies even below these thresholds.

Companies should self-assess if they are qualified as a gatekeeper and inform the EC within two months of crossing the thresholds. The EC will designate qualified gatekeepers and assess them every three years.

Defining Gatekeepers

Obligations for Gatekeepers

Gatekeepers will have to comply with several obligations aimed to protect users, and prevent gatekeepers from acting in a self-serving fashion. Some examples include

● Making apps easier to uninstall

● Not restricting payment methods for purchases

● Heightened portability of data for users

● Gatekeepers can’t rank themselves higher for their own products

● Heightened interoperability requirements

● Ask EC’s permission prior to any M&A activity.

● Hire a compliance officer

Penalties for Non-Compliance

Non-compliance can result in fines up to 10-20% of the Company’s revenue. Ouch!

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