DDigital Markets Act: “with great power must come great responsibility”

Article
EU Law

The countdown is on for digital giants. The Digital Markets Act (DMA)’s entry into force on 1 November 2022 triggered a to do list for potential gatekeepers with key dates to keep in mind.

Practical guidance is upcoming, but the DMA’s list of obligations and prohibitions looms (see our DMA infographic ). Ensuring timely compliance seems key. In the words of Competition Commissioner Vestager, “with great power must come great responsibility”.

In the meantime, digital companies should not lose sight of ongoing antitrust cases and merger control developments (see our April 2022 newsletter).

The DMA’s system

The DMA introduces an ex ante system designed to keep ‘Big Tech conduct’ in check: see our DMA infographic for a concise overview. As of 2 May 2023, digital companies will need to notify the Commission within two months if specific turnover, market value and user thresholds are met that trigger a rebuttable presumption of ‘gatekeeper’ status. The Commission will then decide within 45 working days whether to designate the digital company as a gatekeeper. If designated, gatekeepers have six months to comply with the DMA’s obligations regarding their core platform services on, for instance, data access, interoperability and self-preferencing.

Non-compliance with the DMA obligations may result in fines of up to 10% of the gatekeeper’s worldwide turnover. The Commission may furthermore impose behavioural as well as structural remedies, including a temporary merger ban.

Designated gatekeepers will also need to inform the Commission of all their intended ‘digital’ mergers, regardless of whether these mergers are caught under EU or national merger control rules. This information obligation, together with (i) the revived Article 22 merger referral (see our October 2020 newsletter) and (ii) the DMA’s possibility of imposing temporary merger bans, makes the Commission’s ability to scrutinise ‘digital’ transactions virtually airtight.

A DMA implementing regulation with more details on the format for the notification and for the rebuttal of a gatekeeper presumption is upcoming. Guidelines on how to interpret the DMA’s notification thresholds and gatekeeper obligations are also on their way. In addition, the Commission is organising a number of technical workshops to shed more light on the DMA’s obligations.

The ‘traditional’ system

Meanwhile, the ‘traditional’ system is still alive and kicking. Designated gatekeepers should keep in mind that the DMA’s obligations, most of which were inspired by ‘traditional’ antitrust investigations, do not relieve them from potential parallel investigations under the EU and national antitrust rules.

The DMA’s ex ante system will apply next to the EU and national competition rules and ‘traditional’ Big Tech antitrust cases are ongoing (see our April 2022 newsletter).

Moreover, digital companies should be aware of the possibility that the prohibition on abuse of dominance may be applied as a potential ‘back-up plan’ where mergers are not subject to ex ante review.

Key dates

The DMA clock has started ticking. Time for digital companies to plan ahead and put the following key dates in their diaries.
 

Key dates - DMA

1 November 2022

Entry into force

January – March 2023

DMA implementing regulation with rules on procedural aspects such as the right to be heard and access to the file, as well as the format to be used to notify the Commission and rebut a ‘gatekeeper presumption’.

2 May 2023

Full application of DMA

  • Self-assessment of the qualitative and quantitative ‘gatekeeper’ thresholds.

3 July 2023

Notification deadline

  • Notify Commission of meeting ‘gatekeeper’ thresholds
  • Possibility to rebut ‘gatekeeper’ presumption in notification with “sufficiently substantiated arguments” that, even though the DMA’s quantitative thresholds are met, its qualitative thresholds are not met.

6 September 2023

Commission’s decision on gatekeeper designation (within 45 workings days after notification).

6 March 2024

DMA’s obligations apply (within six months after gatekeeper designation).