User:Ana.Rusu.97/Digital Markets Act

Regulation COM/2020/842 final

European Union regulation
Text with EEA relevance
Title	"Proposal for a regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act)"
Applicability	Digital firms considered as "Gatekeepers" due to their significant market power
Made by	European Commission
Made under	Article 114 of the TFEU.
Journal reference	COM/2020/842 final
History
Implementation date	Not before 2023
Preparative texts
Commission proposal	15 December 2020
Proposed

The Digital Markets Act (DMA) is a legislative proposal by the European Commission submitted to the European Parliament and the European Council on 15 December 2020. According to the European Commission, the main objective of this document, is to regulate the behaviour of the big tech firms in the European Single Market and beyond. The European Commission aims to guarantee a fair level of competition (“level playing field”) on the highly concentrated Digital European Market, and in order to do so, it establishes a list of obligations that the designated Gatekeepers will have to respect. Moreover, in case of non-compliance, sanctions mechanisms will be enforced.

By gatekeepers, the European Commission refers to firms that have an important “durable” market position and that meet certain criteria related to the number of users, their turnovers or capitalisation. Even if the list of gatekeepers has not been released yet, it is more than likely that the American '"Big Tech" or "GAFAM" will be the main target of the regulation.

Together with the Digital Services Act  (DSA), published on the same day, the DMA is part of the “Shaping Europe’s Digital Future” which is the European Digital Strategy. The DMA was presented by Executive Vice President of the European Commission for A Europe Fit for the Digital Age Margrethe Vestager and by the European Commissioner for Internal Market Thierry Breton, as members of the Von der Leyen Commission.

Objective of the DMA

The DMA targets specifically Big Tech companies. The DMA proposed to classify certain platforms, for example those with more than 45 million users in Europe, including Apple, Google, Facebook and Amazon as ‘gatekeepers’ making them subject to new obligations. Aims at preventing large companies to abuse their market power and to allow smaller and new players to enter the market.

The Rationale behind the DMA

In December 2020, the European Commission released a legislative proposal that intends to protect consumer welfare and to restore a level playing field in the European Union’s digital market. At the moment, the economy is being driven to a large extent by the activities conducted through online platforms. Despite the fact that there are 10.000 companies which activate in the European Union and that they are considered necessary tools for engaging consumers, solely a few large platforms have the ability to set the standards for innovation, competition, or for consumer’s choice

As shown in the below, EU digital markets face a high level of concentration, with companies such as Google or Facebook controlling almost the entirety of a specific market segment. In the digital economy jargon, these companies are defined as digital intermediation platforms and are the heart of online economic activities. Thus, these platforms act as online intermediaries which link and facilitate interactions between economic agents’ groups from different sides of the markets (typically consumers or end-users with business-users).

Sectors	Dominant Company	Share of the EU market
Desktop OS	Microsoft Windows	78%
Web browsers	Google Chrome	60%
Search	Google	95%
Social Media	Facebook	90%
E-commerce	Amazon	30% share of users and 60% in terms of revenue
Travel/Booking	Booking.com	35%
Video Streaming	Netflix, Amazon, HBO, Sky and Dazn	90% of the Market revenue
Audio-Streaming	Spotify Apple/Amazon	55% of users 25% of Users
Mobile OS (global Market)	Android iOS	72% 27%

Although these companies are based on different business models, they are characterised by several common factors that explain their capacity to capture big shares of their respective market segment. It should be mentioned that these markets’ characteristics encompass: 1) important economies of scale and scope on the supply side; 2) strong direct and indirect network effects on the demand-side; and (3) data-driven competitive advantage. However, their combination leads to market dynamics that eventually favour “winner-takes-most" scenarios.

For example, the market for mobile operating systems (OS) is formed by one large OS (in terms of consumer base) and a smaller one. Under these circumstances, the higher the number of persons using a particular OS, the more attractive this OS will be for app developers. Indeed, developers tend to favour the largest OS for their apps because this involves a larger customer base. Due to these factors, in time, the gap between benefits provided by larger, respectively, smaller OS is expected to grow. Moreover, the large OS will gather and process more data than its competitors, aspect that will support the improvement of quality. In parallel, the small OS will become less attractive than what it used to be, until it completely vanishes from the market and the largest OS takes all. As acknowledged by Joe Belfiore, the current Corporate Vice President in the Experiences and Devices division of Microsoft, one of the reasons that determined Microsoft leave the mobile market was its inability to attract enough app makers for its operating system.

For a long time, the high level of concentration in digital market was not particularly seen as an issue for regulators. It is considered that digital markets are positively influenced by innovation which can reshuffle market power and facilitate the entry for potential competitors. Whether it holds a dominant position or not, a digital platform could never feel safe as it is always under the obligation to innovate at a greater speed than its competitors, taking into account that competition was known to emerge or to operate “for the market”, rather than “in the market”. Thus, this could have represented in itself a powerful tool for regulation, so as to prevent digital giants from limiting consumer surplus. By way of illustration, Facebook did replace MySpace, Google outcompeted AltaVista, and MSN messenger was overtaken as the main communication platform used on the internet.

However, while the dominant position of MySpace or of AltaVista have only lasted for a few years, it seems that Google or Facebook managed to entrench their dominant position in time, trend which reflects the inapplicability of the abovementioned assumption due to the current dynamics of the digital markets.

During the last years, serious concerns were expressed by authorities across the world with regard to the economic power of some digital giants. In Europe, the European Commission has pointed out that a part of those intermediation platforms may be considered “gatekeeper” or “structuring platforms” in their respective market segments  Due to their size, market position, financial capacity, community of users and/or the data they hold, some companies developed the ability to control access, to significantly affect the operation of the market in which they operate but they have also gained bargaining power on other market player. As acknowledged by Alexandre de Streel - professor of European law at the University of Namur and specialist in EU competition law - this may give raise to “competitive and exclusionary issues when, for example, the platform providing intermediation services (i.e. services connecting business users and consumers or end-users) also competes with business users in their respective markets. This may also raise exploitative and fairness issues when the platform is using its bargaining powers to the detriment of the legitimate interests of its users“.

Under EU competition law, reaching a “dominant position” or the scenario of “winner takes all” are not considered illegal. However, practices that lock in the dominant position and that impose unfair practices with regard to third parties might be seen as unlawful. The belief of the European Commission - backed by years of enforcement experience in EU competition law – is that the Big Tech has been unlawfully taking advantage of their market and bargaining power to increase their influence and secure leading position in new sectors of activity. Hence, by providing unfair advantages to the incumbents in core and ancillary services, distorts competition and may harm the consumer in the long run through either increased prices or reduced options.

By launching the Digital Market Act, the aim pursued by the European Commission is to increase digital markets’ contestability and fairness. By establishing market contestability and diversity as policy objectives, the European Commission seeks to foster innovation by new entrants over innovation by the incumbents. On the one hand, the DMA has the scope to constrain gatekeepers’ range of action, but at the same time it also seeks to force the incumbents to open to competition. Like we said, this may not be necessary beneficial to the consumers in the short term, but faithful to its ordo-liberation tradition, the European Union is choosing “long term competition over short-term efficiencies”.

During the last decade, some digital platforms have been increasingly associated with the ability to act as “gatekeepers”. Or to put it otherwise: they became a prerequisite for business users and consumers/end-users to have access to a large group of participants that are not reachable elsewhere. Underlying this development, there are market characteristics such as extreme economies of scale, strong network effects and the competitive advantage that derive from collecting/storing/using large amounts of data.

Criteria defining gatekeepers

Given the fact that EU competition law can be applied only when anti-competitive practices have been enforced, in the literature was initiated a large debate with regard to the ex-ante regulation. Once the utility and efficiency of the existing tools began to be questioned, the policy discussions held before the release of the Digital Markets Act focused on the identification of gatekeepers, on setting obligations, and on potential conducts that should be outlawed for gatekeepers.

Following the same line, scholars came to the conclusion that large online platforms ″operate as digital gatekeepers between businesses and citizens″. At the moment there is not established a clear definition for this term, but it can be mentioned that it usually refers to ″platforms providing online services (e.g. online marketplaces) or controlling and influencing access to online services (…) thereby exercising control over entire ecosystems, with a strong impact on competition and innovation in the digital field″.

Under these circumstances, right before the adoption of the Digital Services Act, the Commission made public its intention to regulate large online platforms for better ensuring that markets influenced by these actors remain fair and competitive. Thus, the European executive aimed to implement an ″ex-ante regulatory instrument″, through the Digital Markets Act (DMA), for tackling the limitations imposed by its current competition rules.

For classifying platforms as digital gatekeepers, a combination of quantitative and qualitative conditions is required. On the one hand, quantitative criteria include indicators for ″market shares, number of users affected by platform operations, time users spent on a platform's website, and the platform's annual economic revenue″. Thus, the following aspects are analysed:

• ″The undertaking to which the core platform service(s) belongs has an annual EEA turnover equal to or above EUR 6.5 billion in the last three financial years or has an average market capitalization of EUR 65 billion or higher and provides a core platform service in at least three Member States″.

• ″It operates a core platform service that serves as an important gateway for business users to reach end-users. The criteria are supposed to be met when the core platform service has more than 45 million monthly active end users established or located in the Union and more than 10.000 yearly active business users established in the Union in the last financial year″.

• ″It enjoys an entrenched and durable position in its operations, or it is foreseeable that it will enjoy such a position in the near future. Which translates by meeting the thresholds of point 2) in each of the last three financial years″.

On the other hand, the qualitative criteria are harder to assess, but several variables can be taken into account, such as the ability of a platform to control access or to leverage its dominant position. While large platforms designed as search engines or marketplaces may be identified or referred to as digital gatekeepers, it is not clear whether companies that have as subject other activities - travel or music - can be automatically included in the same category. However, even though the legislative proposal does not mention explicitly the undertakings that meet these thresholds, it is expected that the GAFAM will be subject to the DMA.

At the same time, it should be specified that through market investigation, even providers of core platform services - that cover solely a part of the concerned thresholds - may be identified as gatekeepers by the Commission. ″In conducting its assessment, the Commission shall take into account foreseeable developments of these elements.

       ″Where the provider of a core platform service that satisfies the quantitative thresholds (…) fails to comply with the investigative measures ordered by the Commission in a significant manner and the failure persists after the provider has been invited to comply within a reasonable time limit and to submit observations, the Commission shall be entitled to designate that provider as a gatekeeper″. 

       ″Where the provider of a core platform service that does not satisfy the quantitative thresholds (…) fails to comply with the investigative measures ordered by the Commission in a significant manner and the failure persists after the provider has been invited to comply within a reasonable time limit and to submit observations, the Commission shall be entitled to designate that provider as a gatekeeper based on facts available″.

Given the importance and the innovative character of the DMA proposal, several stakeholders have engaged and proposed scenarios for applying a test with the purpose of identifying digital gatekeepers. The UK Competition Market Authority came with the suggestion of implementing ex-ante rules for companies known to possess ″strategic market status″. Thus, they proposed three factors to be considered: the size and scale; ability to leverage their market power in other sectors of activity; to hold the position of access point both for consumers and businesses. Furthermore, the Centre on Regulation in Europe published a lengthier and in-depth analysis, according to which ex-ante regulation should be applied if online platforms comply with four cumulative criteria: large size; to occupy a position on which other businesses rely/ depend; gatekeeper position that lasts (due to high entry barriers); gatekeeper having control over an ecosystem.

New obligations for gatekeeper platforms

One key objective is to put an end to a practice called self-preferencing by companies like for example Google, which can display their products more prominently among the results of Google search. Gatekeeper companies could also be prohibited to re-use people's personal data in other products, for example Facebook could be restricted in using the data obtained from its subsidiary WhatsApp. Companies that do not comply with the new obligations risk fines of up to 10% on their worldwide turnover.

Stakeholder's interests

Gatekeepers

In the research conducted by Cristina Caffarra and Fiona Scott Morton there were presented the possible obligations for gatekeepers and the evolution of their application to actors such as Google, Facebook, Amazon, and Apple. While drafting their findings, the scholars identified that the business models differ in systematic ways in terms of:

• “type of economies of scale they rely on (data scale, R&D costs);
• type and direction of network effects (direct/indirect, one/both directions);
• the potential for multihoming (on one or both sides), and
• the potential for disintermediation, either by someone else “introducing a different layer” intermediating two sides of the platform (e.g. end users and business users) or finding a way for two sides to connect to each other directly".

Moreover, the authors consider that these distinctions with regard to business models determined the European Commission to ensure the application of effective rules adapted to each setting.

The act involves significant changes to the current competition landscape within the European Union. Thus, its ambitions convinced the GAFAM to influence the final version of the document through lobbying strategies.

Google

The tensions between Google and the European Union have been generated by sanctions applied to unfair practices related to advertising, mobile operating system, or shopping strategies. Several fines were imposed by the Commission to Google because of breaches of competition law but taking into account that despite the CJEU’s rulings, “inefficient market outcomes in terms of higher prices, lower quality, less choice and innovation” still emerged, the DMA aims to better regulate this area.

As the main focus of the Digital Markets Act is represented by operators that provide search engines, social networks, cloud computing services and operating systems, Google was one of the companies that officially presented its position. In an interview, Google’s President of Business and Operations for the EMEA region Matt Brittin stated that: “It’s so important to get the rules right for European consumers to have more choice, to support the kind of jobs we’ll need in the future and to support European businesses”.

Even though not particularly named, Google is one of the companies that will be affected by the stringent rules, because the legislation will be applied to firms with European revenues of at least €6.5bn or at least 45 million users across Europe. Nevertheless, as subject to potential fines of up to 10% of its global revenue for breaking the rules, Google is highly incentivized to continue influencing the legislators and lobbying in Brussels for obtaining better conditions under the Digital Market Act.

The rhetoric of Google and its attempts to contour an official position relied mainly on the risks that might emerge from the legislative act, namely barriers - “as Europeans will only have access to less choice and to more costly alternatives”. Nevertheless, the big tech has also tried to highlight the weaknesses of the Digital Market Act and they labelled it a blacklist - whose implications in terms of interoperability might not generate innovation in the future, but incentives for “lowest common denominator”.

In November 2020, the newspaper Le Point published Google’s leaked lobby strategy on the Digital Market Act, thus several practices and intentions have been uncovered. For example, there were made references to:

• “Lobby at Parliament, Commission and member state level;
• Re-frame the political narrative around costs to the economy and consumers;
• Mobilise third parties (such as think-tanks and academics) to echo Google’s message;
• Mobilise the US Government;
• Create “pushback” against Commissioner Breton (who was seen as supporting potential break ups)
• Create conflict between Commission departments”

As far as the cost of these lobbying practices is concerned, according to the Transparency Register, Google spent in the first half of 2020 more than 19 million euros. Thus, in exchange of the money paid it was granted access to officials and to hundreds of meetings within the European Parliament and the European Commission. However, even though the sum of money allocated by Google has already reached significant levels, the numbers presented above do not comprise all the transactions related to academic partnerships, law firms, or activities conducted in individual Member States.

Corporate Europe Observatory investigated the fight of EU tech regulation and according to its findings, 158 meetings were registered since the Von der Leyen Commission took office, meetings that “involved 103 organisations, mostly companies and lobby groups. Only 13 actors had at least 3 or more meetings logged on these issues. Google stands out with the most meetings with Microsoft and Facebook trailing close behind. Apple and Amazon have also lobbied on the DMA and/ or DSA, although they rank lower overall with two and one meeting respectively”. However, one of the limitations faced is represented by the fact that the endeavours with the officials responsible for drafting the legislation are not mentioned, as only the official meetings with high representatives are declared or announced.

Despite the fact that the proposal has been published on the 15^th of December 2020, the lobbying practices still represent an ongoing process because they have been transferred from the Commission to the European Parliament and Council. However, comparing the data obtained on the meetings of the European Commission with the information made available by the other institutions, it can be observed that transparency is even less stringent.

Apple

The new European draft legislation has also targeted Apple's App Store with regard to its practices and preinstalled applications. One of the main changes that will be brought to their current business model is represented by the removal of the “self-preferencing” strategy. As a result of the proposal on the Digital Market Act, Apple would be forced to change the manner in which its apps are displayed in the App Store searches, so as to give the chance to smaller developers to have their software downloaded by consumers. Moreover, Apple will have to allow its customers to uninstall preloaded first-party apps from the devices procured. Thus, both Google and Apple will be constrained and their practices more regulated, given the fact that according to the DMA final proposal, these big tech companies will be compelled to share performance metrics for free with advertisers and publishers.

Before the official release of the DMA proposal, some companies, including Apple, tried to change their anti-competitive behaviour, taking into account the reactions generated by the Commission’s intent to regulate the digital market. As far as Apple is concerned, it should be noted that in October, a group of French publishers - led by Alliance de la Presse d’Information Générale (APIG) - highlighted its concern with regard to the App Store’s terms of service. For example, one of their requirements was related to the economic dependence on Apple - “Content publishers are in a situation of absolute economic dependence on Apple for the distribution of their content on the iPhone, since the only store available on this device is the AppStore”. In addition, Apple was criticised for the 30% commission on sales that it makes through apps on the platform, thus the APIG showed its concern vis a vis the further concentration on the market. The reaction of Apple to these allegations was focused especially on a reduction of its commission rate to 15% for app developers with less than $1 million in annual net sales, but this did not impede the European Commission to continue advocating for the Digital Market Act.

Similar to Google’s case, Apple also seeks to limit the influence of the Commission and to escape the definition of gatekeeper, so as not to become subject to further obligations. However, as Brussels still wants to outlaw gatekeepers’ ability to ban others from accessing their marketplaces, firms like Spotify and Facebook - that believe Apple has set unfair conditions on those companies' apps within App Store, seem to support the Commission’s proposal.

The strategy of Apple to limit the influence of the DMA is not as clearer or well-structured as in the Google’s case. However, there can be observed some practices engaged by the company so as to ensure that its objectives are taken into account by the European officials. According to a research conducted by the Corporate Europe Observatory, it seems that Apple, Google, and Facebook use to work with several associations, that declare themselves independent, without disclosing their linkages. For example, the Center for European Reform has featured on its website a list of its corporate donors - one of them is Apple - but when it comes to the US giant, it does not specify this information on the Transparency Register entry. Under these circumstances, it can be observed the network created around interests’ groups, companies, NGOs and think tanks, as all of them seek to shape the legislative process in Brussels in their favour.

When it comes to lobby spending, despite the limited and incomplete information we found, it can be observed that Apple is in the top 30 individual corporate lobby spenders in Brussels, at numbers 16 (with over €2 million). In comparison with Google, that has allocated a budget of €8 million, Apple still invests a considerable sum of money on access to European officials, so as to present its demands.

As the European Union has expressed its goals to achieve key outcomes with regard to the Digital Market, we can expect even stronger lobbying practices in the future. Considering that transparency is not a defining characteristic for these companies, it will be extremely difficult to assess their influence and success, by relying solely on limited information or presumptions.

Facebook

Considering that the Digital Markets Act aims to limit the influence of large companies, by allowing alternative players to emerge, Facebook has also been targeted by the legislative proposal. As in the other companies’ case, once with the adoption of the DMA, unfair practices will be highly discouraged and even prohibited, so as to stop the harm they bring to competition.

However, apart from Google, Apple, and Amazon, Facebook seems to support the EU rules that have been published last year. In its official declarations, Facebook Inc claimed that it hopes that the European Union will set boundaries for Apple. Nevertheless, in this context there were not observed solely tensions between the Commission and the Big Tech companies, but even between GAFAM, taking into account their statements and the objectives they advocate for.

The controversies between Facebook and Apple started with the privacy feature used by Apple, that allows consumers to block advertisers from tracking them across different application. Thus, Facebook - a company that earns revenue from advertisement, began to retaliate and showed its discontent. It has also added that “Apple controls an entire ecosystem from device to app store and apps, and uses this power to harm developers and consumers, as well as large platforms like Facebook”. The reaction of Apple was quite harsh and accused Facebook of “invasive tracking”. Therefore, the discussions around the Digital Markets Act started to create more tensions between Big Tech firms and to deviate from the scope of the proposal, as the companies focused on criticising their “competitors” of illegal practices.

Amazon

Amazon welcomed the DMA and according to its position, the company has not been as concerned about it as the other GAFAM members. This can be explained by the fact that compared to Google’s and Apple’s case, the Digital Markets Act could affect Amazon only in three aspects:

• Amazon may be obliged to allow business users to offer the same products or services to end-users at prices or conditions that are different from those offered by Amazon (DMA Article 5b)
• Amazon may be obliged not to use data from competitors that are not public (DMA Article 6a)
• Amazon may be obliged not to treat favorably the services and the products it offers (DMA Article 6d)

The interdiction on using non-public data from the competitors it hosts on its platform and the interdiction on ranking its product before the ones offered by competitors mayimpact Amazon if the proposal of the DMA will be adopted under its current form. Moreover, these aspects determined Amazon to negotiate the final version of the DMA, taking into account that it spent €1,75 million on lobbying practices and that it became a member of several think tanks.

Microsoft

Comparing to other Big tech firms, Microsoft is the most discrete, as it does not use media or newspapers to express its opinion on the Digital Markets Act. The only thing done in a public manner by Microsoft was to react to the Commission's consultations. They suggested that the qualification of platforms as gatekeepers to be determined by using a two-pronged test. On the one hand, it should be assessed the level of market power protected by significant barriers to entry. On the other hand, specific EU regulatory body for the enforcement of ex-ante regulation should be implemented. Moreover, according to Caffara & Morton, the only obligation that might affect Microsoft under the DMA is to allow end-users delete any software applications pre-installed.

Non-Gatekeeper Firms

A narrow definition of gatekeeper

Before the release of the proposal, there was a debate related to the criteria needed for designating a company as gatekeeper. On a more general note, one of the most important indicators would be considered the number of firms impacted by the DMA. As this narrow definition for gatekeepers has been applied by the European Commission, only a few firms (especially the American Big Tech' or 'GAFAM) are likely to be targeted by the concerned legislation.

Airbnb and Booking.com

Due to their important positions on the short-terms stays market, AirBnB and Booking.com became potential targets for the legislation. Indeed, above 50% of the homes designated for ‘short-terms stay’ are listed on AirBnB, and approximatively 1/3 on Booking.com. Therefore, their possible labelling as gatekeepers has been long debated, aspect that led to companies defending themselves and explaining why they should not be considered included in this category. Moreover, Booking insisted on the fact that it is one of the only European companies that has a global success and that as they are not the most dominant actor in this sector, they should not be disincentivized while competing with bigger companies.

Spotify

With approximatively 1/3 of the market share in 2020 on the Music Subscription market, Spotify is by far the dominant actor in this sector as Apple music comes in second position, with around 15% of market share. However, Spotify does not seem to meet the criteria set by the European Commission, according the analysis of VOX EU. Dirk Auer, an economist of the American Think Tank ICLE qualified this piece of legislation as a way to protect the European firms, and that the criteria are on purpose excluding major European tech firms, notably Spotify. Even if it is true that SAP would probably be the only European firm targeted by the legal act , there are also American big platforms like Twitter or Uber not targeted by the legislation, despite their important market position.

European Member States

France  

The French Government expressed its ambition for imposing stricter enforcement on competition rules, so as to prevent giant tech firms favoring their own services, ousting rivals or maintaining their dominant positions.

Nevertheless, France would like to rely on the possibility of adapting the rules, through the Digital Markets Act, in order to respond to the constant changes of the digital market.  

France is known to be publicly in favour of more regulation of the GAFAM and set up unilaterally it's "GAFA TAX" in 2019. This tax has been sources of tensions with the Trump administration.

Germany  

The German Federal Government welcomed the proposal on the Digital Market Act. They agree that the current European legal framework is not sufficiently strong and that the enforcement measures must also be strengthened vis-à-vis digital platforms. However, the main concern of Germany still remains the preservation of small and medium-sized companies, as it intends to escape them from the scope of the new rules.

Netherlands  

In October 2020, the Dutch Government, jointly with France and Belgium, expressed their willingness for a stricter enforcement of the competition rules, in order to avoid abuse of dominance and anti-competitive practices.

On February 17, 2021 the Dutch Government published its official position on the Digital Markets Act proposed by the Commission, and they welcomed the initiative, taking into account that the objectives it comprises are aligned with their national position.  

Ireland  

The Irish government published its position on 8th of September 2020 during the public consultations held for the Digital Services Act Package.  

The Irish Government is not willing to assess the definition of ‘gatekeepers’ on their market power, as they explained that the occupation of a dominant market position is not illegal. Moreover, they have also stressed that this particular aspect that characterizes some platform does not imply a diminution of the consumer welfare and does not prevent innovation or new entrances in the digital market.

Many of the companies that are likely to be targeted by the DMA have their headquarters in Ireland. The treatment reserved by the Irish State to the big tech companies has often been sources of debates within the Member States of the European Union. In 2016, the European Commission accused Ireland to grant Apple "illegal tax benefits". The European Court of Justice has ruled in favour of Apple 2020 but the Commission said they would go in appeal.

Rest of the world's position

United States

Even though they are not mentioned explicitly in the proposal released by the European Commission, it is more than likely that the American "Big Tech" (Google, Amazon, Facebook, Apple, Microsoft) also called the GAFAM, will be the main targets (if not the only) of this new legislation. The official position of the Biden administration will represent an important step, as it remains an open question whether or not the government of the United States will defend the cause of the American giant tech companies in the European Digital Market.

This legislation comes in a context where the EU and the US, under the Biden administration, want to rebuild a better relation after the tensions emerged during the Trump’s presidency. The European Commission has stressed the need for cooperation between the EU and the US to deal with the dominant position of online platforms and big tech that they consider harmful . In January 2021, the president of the European Commission, Ursula von Der Leyen stated that the current president of the United States, Joe Biden, and the European Union share the same position regarding the the regulation of tech companies. In a speech at the Munich Security Conference in February 2021, she invited the United States to join the European Unions in their intitatives in order to create rules in the digital Economy that can be "valid worldwilde" .

Even if the official position of the Biden administration about the Digital Markets Act is not publicly known yet, the same debates about the dominant position of some digital tech platforms are rising in the United States too. A antitrust lawsuit has even been opened in December 2020 against Facebook by the US Federal Trade Commission and 46 American states for abusing its dominant position and exercing anti competitive conducts for several years .

In a document published in March 2021, the Congressional Research Service, a public American think tank that informs the members of the US congress, outlined the fact that the new Digital regulations lead by the European Union, including the Digital Markets Act, can be sources of potential future cooperation between the EU and the United States, while stressing the potential impact on the US economy.

Next steps

The DMA is currently a legislative proposal. In order to become law it requires the approval by the European Council and the European Parliament, which is expected to take around a year and a half from the time the DMA was proposed by the European Commission in December 2020. In January 2021, the Parliament Internal Market Committee confirmed that the EPP group will lead the DMA in Parliament.

External links

• Text of Commission's proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on contestable and fair markets in the digital sector (Digital Markets Act)

Category: Policies of the European Union Category: European Digital Strategy Category: 2020 in law Category: 2020 in the European Union Category: E-commerce in the European Union