The Digital Markets Act ("DMA") goes live

What is the DMA? What kind of obligations does it impose?

The DMA establishes new competition rules on large digital platforms qualifying as so-called “gatekeepers”, being large online platforms that provide an important gateway between business users and consumers, such as search engines, cloud computing services, marketplaces and social networks.

The DMA sets out a series of obligations and prohibitions including for example:

•  a ban on combining or cross-using personal data,
• a ban on self-preferencing in ranking and related indexing and crawling,
• an obligation to enable interoperability of number-independent interpersonal communication services, and
• an obligation to submit an independently audited description of any profiling techniques applied.

Is your company impacted by the DMA? What is a “gatekeeper”?

The DMA is applicable only to companies designated as “gatekeepers” by the European Commission (“EC”).

Specifically, there are three main cumulative requirements that presumptively lead to a designation of a platform as a gatekeeper:

1. Size of the company: if the company achieves an annual turnover in the European Economic Area equal to or above €7.5 billion in each of the last three financial years, or where its average market capitalisation or equivalent fair market value amounted to at least €75 billion in the last financial year, and it provides a core platform service in at least three Member States.
2. Number of users: if the company operates a core platform service with more than 45 million monthly active end users established or located in the EU and more than 10,000 yearly active business users established in the EU in the last financial year.
3. Entrenched and durable position: if the company met the second requirement in each of the last three financial years.

Organisations that meet the relevant criteria above are presumed to be gatekeepers but can rebut the presumption and submit substantiated arguments to demonstrate that they should not be designated as such.

How will the DMA be enforced? What sanctions does the DMA foresee?

The EC is the sole enforcer of the DMA, which essentially has similar investigatory powers to those it has within the context of competition law infringements (e.g., requests for information, conduction of interviews and dawn raids, imposition of fines).

Infringements of the DMA may entail fines up to 10% of the total global annual turnover of the gatekeeper, which can be increased by   up to 20% of the total annual turnover in the event of repeated offences.