EU’s Digital Markets Act is Here – What’s next?

Linklaters | | Jun 8, 2022

The DMA is intended to be a gamechanger for the largest digital platforms. Attention is now shifting to what the DMA will mean in practice.

Following political agreement on the text in March, the DMA should enter into force in October 2022 and apply from Spring 2023 (see the latest public version here).

While much (digital) ink has already been spilt since the Commission proposed the DMA in December 2020, the practical reality is soon set to emerge. How the Commission, would-be gatekeepers, other market participants and national regulators implement and participate in the roll out of the DMA will shape what it means in practice for digital markets. It will ultimately also determine the DMA’s success as the most significant addition to the Commission’s regulatory toolbox since the first iteration of the Merger Regulation in the 1990s.

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EU Executive Vice-President Vestager:

If there is a systemic misbehaviour, then we need regulation to come in. For companies that play a role as gatekeepers, now the Digital Markets Act will set the rules of the game.

We have identified five key issues to watch out for as the DMA is implemented:

  • Gatekeepers: who and what will make the cut? Despite the DMA’s quantitative thresholds, there remains inevitable ambiguity over those firms sitting on the boundary line. Such cases are likely to spark considerable debate as soon as the DMA comes into force in Spring 2023, with would-be gatekeepers weighing up whether to challenge any presumptive designation.
  • When does black and white equal grey? Determining what gatekeepers must do to comply with the DMA. While unlikely to come to the fore until late 2023 at the earliest, the DMA’s procedural mechanics for how gatekeepers must implement its more complex rules will need to balance different regulatory objectives and competing commercial interests. The effectiveness of such mechanics is likely to go a long way to determining the effectiveness of the DMA as a whole.
  • Who does what, when: regulatory comity under the DMA. A blurred, demarcating line between the DMA and conventional competition law means that effective cooperation within the Commission, as well as between the Commission and the NCAs, is likely to be critical for ensuring coherent and efficient application of competition policy to digital markets across the EU. The potential for private enforcement of the DMA will also force national courts and the Commission to cooperate to ensure the consistent application of the DMA’s more complex provisions.
  • Trend setter or out on a limb: the global reach of the DMA. The DMA may set global standards for digital market regulation if gatekeepers adjust to the DMA’s rules on a global basis, or it may mark a significant step towards regulatory fragmentation if they opt for implementing bespoke business models in the EEA. The differing commercial implications for gatekeepers, as well as the uncertainty over similar legislative efforts in China, the U.S. and the UK mean, however, that gatekeepers may well take different approaches, at least initially, with the end state unlikely to emerge in the near term.

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  • DMA-ification of competition policy. The final question is whether the DMA will evolve as a competition instrument or is it more likely to be a time-limited answer to a specific set of perceived regulatory problems. As expansion of the DMA into new markets is subject to legislative approval, its success is likely to drive both whether the DMA evolves and whether it becomes a template for regulatory intervention in other sectors.

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