The Digital Markets Act – Obligations and Prohibitions for Digital Service Providers

The Digital Markets Act (“DMA”) was published in the Official Journal of the European Union on 12 October 2022 and enters into force on 1 November 2022. The DMA starts to apply from 2 May 2023, at which point the European Commission will start designating undertakings as gatekeepers. Once an undertaking has been designated as a gatekeeper, it must comply with all obligations and prohibitions set out in the DMA within six months from the date of the designation decision.

Obligations and prohibitions for gatekeepers

The the obligations and prohibitions imposed on gatekeepers in their provision of core platform services are set out in DMA Articles 5–7. These obligations and prohibitions are summarised below.

Obligations

The DMA obliges gatekeepers to:

• allow business users to use their platforms to promote offers to and conclude contracts with end users (Article 5(4));
• allow end users to use a business user’s software applications to access and use content, subscriptions, features and other items through the gatekeepers’ platform services, including where the end users acquired such items from the relevant business user without using the core platform services of the gatekeepers (Article 5(5));
• ensure transparency on prices and fees of their advertising services, as well as giving business users access to advertising performance data (Articles 5(9)–(10), 6(8));
• allow end users to uninstall pre-installed software and allow for the installation of third-party equivalents on electronic devices using the gatekeepers’ operating systems (Articles 6(3)–(4));
• ensure effective interoperability of both hardware and software operating systems Article 6(7));
• provide access to, and effective portability of, data generated through their core platforms to users (Articles 6(9)–(10));
• apply fair, reasonable, and non-discriminatory (FRAND) general conditions of access for business users to their software application stores, online search engines and online social networking services (Article 6(12));
• ensure effective interoperability of the basic functionalities of instant messaging services, such as text messaging, voice and video calls and sharing of for example images, videos and files (Articles 7(1)–(2)).

Prohibitions

The DMA prohibits gatekeepers from:

• processing end users’ personal data collected from third-party services for the purpose of providing online advertising services without obtaining prior consent from the end users (Article 5(2)(a));
• reusing personal data collected during the provision of the gatekeepers’ services for the purposes of another service without obtaining prior consent (Article 5(2)(a)–(c);
• preventing business users from offering their products and services under different prices and conditions on their own online sales channels or on third-party platforms (Article 5(3));
• preventing users from making complaints to public authorities (Article 5(6));
• requiring users to use certain platform services (e.g., payment systems, identification services, web browser engines or technical services) (Article 5(7));
• requiring users to register/subscribe to other core platform services as a condition to use any of the core platform services (Article 5(8));
• using non-public data generated by business users while using the gatekeepers’ core platform services to compete against such business users (Article 6(2));
• treating own products or services more favourably than those of others when providing ranking services (Article 6(5));
• restricting end users from switching between different apps and services (Article 6(6));
• establishing disproportionate termination conditions for business users; (Article 6(13)).

Updates to the list of obligations and prohibitions

Under the DMA, the Commission may update the list of obligations and prohibitions by adopting so called “delegated acts” (supplementary legislative acts stemming from the DMA). Such delegated acts must be based on a market investigation and be targeted at addressing anti-competitive or unfair practises by gatekeepers in their provision of core platform services.

Sanctions under the DMA

Should a gatekeeper not comply with Articles 5–7, the Commission may fine the gatekeeper of up to 10 percent of its total worldwide turnover. Should the gatekeeper commit the same or a similar infringement again within eight years from the adoption of the non-compliance decision, the resulting fine may be as high as 20 percent of the turnover. In cases of systematic infringements – where the Commission has issued at least three non-compliance decisions within eight years – the Commission may impose additional behavioural or structural remedies.

For a full introduction into the provisions of the DMA, please read the full article here.