Insights European Parliament and Council provisionally agree text for Digital Markets Act to limit the market power of big online platforms

The European Parliament says that Digital Markets Act (DMA) will ban certain practices used by large platforms acting as “gatekeepers” and will enable the Commission to carry out market investigations and sanction non-compliant behaviour.

The text, provisionally agreed by Parliament and Council negotiators, targets large companies providing so-called “core platform services” that are most prone to unfair business practices, such as social networks or search engines, with a market capitalisation of at least 75 billion Euros or an annual turnover of 7.5 billion Euros. To be designated as “gatekeepers”, these companies must also provide certain services such as browsers, messengers or social media, which have at least 45 million monthly end users in the EU and 10,000 annual business users.

During the three-way talks between Parliament, Council and the Commission, EU lawmakers agreed that the largest messaging services, such as Whatsapp, Facebook Messenger or iMessage, will have to open up and interoperate with smaller messaging platforms, if they so request. Users of small or big platforms would then be able to exchange messages, send files or make video calls across messaging apps, thus giving them more choice. This obligation on social networks will be assessed in the future.

Further, combining personal data for targeted advertising will only be allowed if explicit consent is provided to the gatekeeper, and users must be able to freely choose their browser, virtual assistants or search engines.

If a gatekeeper does not comply with the rules, the Commission can impose fines of up to 10% of its total worldwide turnover in the preceding financial year, and 20% for repeated infringements. In case of systematic infringements, the Commission will be able to ban them from acquiring other companies for a certain period.

Once the legal text is finalised, it will need to be approved by both Parliament and the Council. Once this process is complete, it will come into force 20 days after publication in the EU Official Journal and will become effective six months later. To read the European Parliament’s press release in full, click here. To read the Council’s press release in full, click here. To read the Commission’s press release welcoming the “swift political agreement”, click here.