Are you using an online platform provided by another for the marketing or sale of your products, or are you competing with any such platforms?

Data is everywhere

These are digital times. The impact and importance of digital services such as, for example, online platforms are growing fast. It has been estimated that in 2019 the digital economy accounted for somewhere between 4.5 and 15.5 per cent of global BNP. However, online platforms are also characterised by a small number of players holding a very large share of the world market – companies like Google, Amazon, META (formerly Facebook), Microsoft, etc. These tech giants have considerable amounts of data on consumer behaviour, which they not only sell to their business users for sale or marketing purposes but also use themselves to expand their online universe and to sell their products. This can make it hard for sellers and advertisers to compete with the tech giants on these platforms and puts tech-giants in a position where they can make it difficult for other digital services providers to access the market.

Therefore, on 14 September 2022, the European Parliament and the European Council adopted the Digital Markets Regulation (better known as the Digital Markets Act, or the DMA for short), which aims to ensure fair competition in digital markets to provide consumers with the cheapest, best and most innovative products possible.

With the adoption of the DMA, the European Commission has been given exclusive authority to designate tech giants as so-called gatekeepers. If so designated, the tech giant must comply with a number of “do’s and don’ts”. These do’s and don’ts will be continuously updated by the Commission, but for now they include, for example, the following.

Examples of do’s

• Users must be able to easily uninstall pre-installed apps and change standard settings.
• Users must be able to install third-party apps or app stores.
• Business users must have access to data generated through their activity on the platform.
• Business users must be able to promote their products on the gatekeeper's platform but to conclude contracts with end users without using the platform.
• Gatekeepers must provide advertisers with free-of-charge access to the gatekeepers’ performance measuring tools and the data necessary for them to carry out their own independent verification of the advertisements inventory.
• Gatekeepers must provide to business users, free of charge, information about the daily average price paid by the business users for their advertisements.

Examples of don’ts

• Gatekeepers may not use, if competing with their commercial users on the platform, the data of those users.
• Gatekeepers may not rank their own products or services above those of third parties.
• Gatekeepers may not demand app developers to use specific services of that gatekeeper, e.g. their particular payment service, as a condition for using the gatekeeper’s app store.
• Gatekeepers may not log and cross-use end users’ personal data on their own or a third party’s platforms or use them on other services offered by the gatekeeper.
• Gatekeepers may not prevent business users from offering their products or services through third-party platforms or their own sales channel at prices or conditions different from those offered through the gatekeeper’s platform.

Also, gatekeepers must inform the Commission of all intended mergers and acquisitions involving providers of core platform services or any other services in the digital sector or enabling the collection of data, irrespective of whether such merger or acquisition meets the thresholds set in national or European law or not.

The DMA is relevant to you too

Although the DMA is directed at tech giants, the Commission intends that the enforcement of it will also rely on private actors. If, for example, you are using a gatekeeper’s platform to sell or advertise your products, or if you are competing with a gatekeeper, you can file a complaint with the Commission over the gatekeeper’s non-compliance with the rules.

Among the sanctions available to the Commission in a case of non-compliance are the imposing of a number of measures to be taken by the gatekeeper and the imposing of fines of up to 10 per cent, or in case of repeated infringements as much as 20 per cent, of a gatekeeper’s total worldwide annual turnover.  Lastly, the Commission can impose periodic penalty payments of up to five per cent of a gatekeeper’s worldwide daily turnover for any failure to comply with the measures decided by the Commission.

Apart from complaining to the Commission over a gatekeeper’s non-compliance with the DMA you can, if you are using a gatekeeper’s platform for sales or advertising purposes or if you are competing with a gatekeeper, also file a civil action for damages for infringement of the rules with a national court of law. To do so, of course, you must satisfy the relevant conditions for damages.

What are the next steps?

As noted, the DMA was adopted on 14 September 2022 and took effect in all Member States, including Denmark, on 12 October 2022, but its terms will not apply until 2 May 2023.

The DMA is based on a reporting system, which means the enterprises which qualify for designation as gatekeepers must notify the Commission thereof not later than two months after the DMA becomes applicable. Then, not later than 45 days after having received the full details, the Commission will decide if the enterprise is indeed to be designated as a gatekeeper. So we will probably begin seeing the first such designations around September 2023. All designated gatekeepers will be identified on a list published and regularly updated by the European Commission. It will be worth your while to check it from time to time if you are in doubt as to whether a particular businesses is subject to the rules.

You can access the Digital Markets Act via the link below and, as always, you are welcome to contact us if you have any questions in relation to the new rules. We will be happy to advise.

Go to the DMA