European Parliament – DMA: The law that will regulate the operation of the giants of digital technology

MEPs have reached a compromise on the most controversial aspects of the EU regulation, which has strict obligations for internet giants.

In particular, the Digital Markets Act (DMA) is designed to control “access regulators”, the online platforms that play a systemic role in the internet economy. So far, MEPs have been fighting for scope provisions, deadly takeovers and targeted advertising.

The proposal is now expected to be approved by the European Parliament’s Internal Market and Consumer Protection Committee on 22 November and then voted on in the December plenary.

Field of application

At the most basic level, EU lawmakers disagreed on which platforms the regulation should target.

Andreas Swab, the Christian Democrat MEP who leads the dossier, favored a narrow scope that would include only four or five major companies, Google, Amazon, Facebook, Apple and Microsoft (GAFAM), to focus on the most influential players.

On the contrary, progressive political groups have pushed for a wider scope, believing that new problems may arise in the rapidly changing digital environment. As a result, the quantitative limits for companies increased slightly: to 8 billion euros for turnover and to 80 billion euros for capitalization.

Swabb’s proposal to consider more than one digital marketplace in the so-called “basic services platform” for the definition of an “access regulator” was rejected. As a result, companies based in Europe, such as Booking, are likely to fall within the scope of the new regulation.

The basic directory of the basic services platform covered e-commerce and video sharing platforms, search engines, social media, operating systems, the Cloud and messaging services. The list has been expanded to include web browsers, virtual assistants, and smart TVs.

Acquisitions – “killers”

An important addition to the proposal was the provisions on “lethal acquisitions”, ie acquisitions of companies aimed at cutting off emerging competitors. The European Commission has expressed strong reservations about adding such measures to the DMA, as the legal basis of the regulation is the internal market and not competition policy.

Proponents of antitrust law, including former Competition Commissioner Tomaso Valletti, have emphasized the need to include such provisions in the DMA, as reform of the Union’s competition manual is hampered by .

Under the final compromise, the Commission could impose temporary restrictions on acquisitions on platforms that have systematically breached their obligations.

“In this way, the Commission could take into account various factors, such as: potential network effects, data integration and potential long-term effects, or whether and when achieving targets with specific data resources could significantly jeopardize market competitiveness. through horizontal, vertical or cumulative effects “, recital 64 states.

Targeted advertising

Another controversial point was the proposal to ban targeted advertising. The initiative was launched by a cross-party coalition of progressive MEPs who believe that targeted advertising is based on intrusive user monitoring for the benefit of a few companies.

Most liberal and conservative MEPs have argued that a total ban would be disproportionate and hurt small businesses trying to reach their customers via digital media.

The total ban was eventually introduced only for “acquaintances” on the platform as minors, relieving the platform of liability in case a user lies about his age.

For adults, text allows targeted ads based on explicit user consent. It also restricts the processing of personal data related to politics, religion, race, trade union membership and other sensitive information, such as health conditions and sexual orientation.

Noncompliance

The measures for the non-compliance regime under Article 16 are the ones that scare the internet giants now. These give the Commission the freedom to impose structural or remedial measures, which in the most extreme cases may involve splitting the platform into separate entities.

The non-compliance regime will be examined after two infringements, while after the first infringement some corrective measures could be imposed.

The sanctions regime has also been tightened by MEPs. The minimum fine was set at 4% of the annual turnover, which could reach a maximum of 20%.

Additional measures

The compromise text introduces the interoperability of ancillary services, including devices, messaging services and social media, leaving the Commission to set technical standards.

It strengthens the provisions against the interconnection of different services, a practice also known as grouping. The ban on self-reporting has been extended to all services, not just those that provide rankings.

Users will also be able to uninstall applications and change their default settings, as well as transfer the data they generate to a different platform.

euractiv.gr