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EU Digital Markets Act conduct rules to take effect for online ‘gatekeepers’

05 Mar 2024, 4:52 pm

Services run by six major technology companies will be subject to strict new EU regulations, including rules on targeted advertising and interoperability, from Thursday, when conduct obligations affecting online ‘gatekeepers’ take effect under the Digital Markets Act (DMA).

In total, 22 ‘core platform services’, operated by Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft, respectively, are within scope of the new rules, including Google Search, Facebook, the Apple App Store and Amazon Marketplace.

The six businesses were designated as ‘gatekeepers’ under the DMA by the European Commission on 6 September 2023. Meta and ByteDance, the company behind TikTok, have challenged their designations.

Gatekeepers subject to the DMA are prohibited from undertaking certain practices prescribed by the legislation in respect of their core platform services. This includes dictating the price or conditions business users apply to the same products or services they offer via their platform. Gatekeepers cannot restrict end users’ use of business users’ software made available via their platform either.

Other prohibitions include provisions on using users’ personal data for the purpose of targeted advertising, or on aggregating the users’ data from across the different services they provide, without users’ consent, while further provisions encourage equality of access to data and promote interoperability.

Chapter three of the DMA contains a full list of the conduct obligations that gatekeepers face under the regulation, though specific requirements will differ depending on the type of service that is in scope. The Commission published examples of ‘dos and don’ts’ for gatekeepers when it announced its list of designated gatekeepers last September, and it has powers to supplement the provisions of the DMA by introducing additional implementing legislation.

The Commission is responsible for enforcing compliance with the DMA. Gatekeepers face significant sanctions for breaching the DMA, including potential fines of up to 10% of their global annual turnover. For repeat offences, the penalty could increase to 20% of global annual turnover. If a gatekeeper breaches the new rules three times or even more, the Commission can impose a temporary ban on mergers for the business or impose divestment requirements.

The Commission has announced a series of DMA compliance workshops for this month, starting with Apple on 18 March, Meta on 19 March, Amazon on 20 March, Alphabet on 21 March, ByteDance on 22 March, and Microsoft on 26 March. Compliance reports for each gatekeeper are due to be published on the same day as the workshop. The Financial Times recently reported that the Commission has already sent requests for information to Apple and app developers in respect of Apple’s App Store service.

Beyond the initial list of 22 services subject to the DMA from 7 March 2024, the Commission recently confirmed that further services operated by Booking.com, ByteDance and X, had been notified to it as “potentially meeting the Digital Markets Act (DMA) thresholds”. Where it has received such notifications and is able to confirm that the DMA thresholds for gatekeeper designation have been met, the Commission must designate the respective services as subject to the DMA’s rules without undue delay and within 45 working days at the latest.