Digital Markets Act
The Digital Markets Act (DMA) stands as a crucial response to the digital transformation and the rise of online services that have reshaped the way we live and conduct business. The digital transformation has revolutionized the way we live, and it continues to do so by simplifying various aspects of our lives through digital services.
However, this revolution has also raised concerns, such as illegal online commerce. Digital markets transcend borders, leading to an urgent need to harmonize regulations and reduce regulatory burdens for companies operating in the single market.
The European Union intends to tackle these challenges by adopting a new legal framework aimed at protecting not only consumers but also fundamental online rights and promoting a fair and open online platform environment.
This article aims to address some key aspects of the Digital Markets Act, offering insight ahead of its upcoming effective date and full entry into force, which is scheduled for March 2024.
Digital Markets Act: main aims
One of the main aims of the Digital Markets Act is to regulate digital markets, ensuring fair competition among companies within the vast realm of the internet. Grounded in the Treaty on the Functioning of the European Union (TFEU), this law seeks to ensure the proper functioning of the single market and apply competition principles to digital media.
The DMA was published in October 2022, though it will not be fully enforceable until March 2024. This regulation aims to address challenges such as the dominant position of large platforms and their private rules, which often harm other companies and limit consumer choices.
Essential aspects of the Digital Markets Act
This regulation applies to a wide range of digital companies, from online intermediaries to search engines, social networks, video platforms, and others. However, it only applies to companies that meet certain criteria, known as ‘gatekeepers,’ which are large companies with a significant presence in the EU and an established market history, such as Amazon, Apple, Meta, or Microsoft.
The Digital Markets Act establishes obligations, including allowing professional users to offer their services through their platforms under the same conditions as the gatekeeper itself and complying with a set of transparency standards in online advertising, among other requirements.
In case of non-compliance, severe penalties are envisaged, which can amount to up to 10% of the company’s global revenue and up to 20% in cases of recurrence. Furthermore, those affected by non-compliance can take legal action for damages.
The DMA seeks various benefits, including the regulation of dominant companies, a fairer environment for platform user companies, more open and direct access for consumers, as well as a stimulus for startups and tech companies. Ultimately, its goal is to protect consumers and promote fair and equitable competition in the ever-changing world of digital markets.
In summary, both the Digital Markets Act (DMA) and the Digital Services Act (DSA), which we will address in an upcoming article, aim to protect consumers, promote transparency and fair competition in the digital market, and establish a clear regulatory framework for companies in the European Union, fostering a safe and reliable online environment.
At Letslaw by RSM, we are specialized digital lawyers and can provide advice regarding your concerns about this new European regulation and its implications for content and transparency that may directly affect you or your clients.
Letslaw es una firma de abogados internacionales especializada en el derecho de los negocios.