The EU Digital Markets Act (DMA) was published in the Official Journal of the European Union on 12 October 2022 and will enter into force on 1 November 2022. Companies that meet the DMA’s quantitative thresholds will have until July 2023 to notify the European Commission; and those subsequently designated by the Commission as so-called “gatekeepers” will be expected to comply with the DMA’s obligations from March 2024. We gave a brief recap on the DMA’s application and obligations in a recent blog. This blog sets out what we can likely expect next from the Commission and other key stakeholders.
The “gatekeeper” designation process
The first major milestone in the process will be the “gatekeeper” and “core platform service” (CPS) designation process.
The formal process is expected to kick off in summer 2023, with companies meeting the relevant quantitative thresholds required to notify the Commission by July 2023. The Commission will then determine how it will designate an individual gatekeeper as having one or more CPS, taking into account how it functions as an “important gateway” for businesses to reach their customers and the DMA’s focus on benefiting both business users and consumers.
Commission guidance and engagement
The Commission is expected to issue guidance in a wide range of topics (see Articles 46 and 47 of the DMA). As a first step, the Commission is expected to launch a public consultation on a draft DMA Implementing Regulation shortly, with a view to adopting it in early 2023. The Implementing Regulation should provide more detail on the notification form to be used by undertakings that meet the quantitative thresholds, procedural issues (such as the right to be heard and access to file), and the possibility of suspending obligations where they endanger the economic viability of “gatekeepers” (as per Article 9).
However, given the Implementing Regulation is expected to focus on procedural issues, it will be important for the Commission to provide further timely guidance on the substantive parts of the DMA. In particular, for example, on the core obligations contained in Articles 5 and 6 of the DMA that will apply to so called “gatekeepers” (see our previous blog post here).
Different Commission representatives – including Executive Vice-President Margrethe Vestager and Head of DMA Taskforce Lea Zuber – have suggested that prospective “gatekeepers” should engage with users on their anticipated compliance measures and have indicated that the Commission will also organise workshops in the near future where consumers and other stakeholders, including prospective gatekeepers, can express their views on the application of individual obligations. Going forward, such engagement will need to be balanced with the legal scope and principle underpinning the DMA, the benefits of digital markets currently enjoyed by businesses and consumers, and the compliance timeframes now applicable.
The enforcement of the DMA is expected to involve collaboration between the Commission’s Directorates General for Competition (DG COMP) and Communications Networks, Content and Technology (DG CNECT), whereby the responsibility to lead on certain CPSs and obligations is expected to be split between the two DGs.
As we reported previously, a number of Commission officials (including Alberto Bacchiega, who will become the new DMA director, and MEP Andreas Schwab, in the context of EU Budget 2023 negotiations) have suggested the Commission’s original budget for 80 enforcement officials in the “DMA unit”, between 2021 and 2027, is insufficient.
It remains to be seen whether Member States will be willing to provide the necessary funding, with negotiations on the EU Budget 2023 expected to be concluded by the end of 2022. As of today, the Commission’s draft budget for 2023 has requested more personnel for the enforcement of the Digital Services Act, with no such request having also been made for the DMA.
One suggestion from national authorities, including the heads of the Dutch and French competition authorities, has been for national competition authorities to contribute staff for “joint enforcement” with the Commission. This may be something we will see the Commission exploring further during its consultation on the Implementing Regulation.
Collaboration or fragmentation?
While the Commission is the sole authority responsible for enforcement of the DMA, the DMA provides for various ways in which Member States can become involved in the Commission’s investigations. For example, the Commission can nominate officials of national authorities as experts to support its investigations (Article 26 of the DMA) and citizens can provide national authorities with information about alleged DMA infringements, with the possibility for national authorities to conduct their own analyses of such claims and to inform the Commission where they consider them to be credible (see Article 27 of the DMA).
National lawmakers are also considering how best to use or amend existing legislation to assist with the enforcement of the DMA, including with respect to private enforcement, which is likely to play a significant role in interpretation and enforcement of the DMA, especially in its infancy. For example, the recent proposal for the 11th Amendment to Germany’s Competition Act includes provisions which would empower the German Federal Cartel Office to conduct investigations into non-compliance with the DMA and expand provisions concerning private enforcement of competition law to be equally applicable to the DMA.
Indeed, it remains to be seen how the relationship between the Commission and Member States (and indeed private litigants) will play out in the future, particularly given the DMA’s legal basis is premised in avoiding regulatory fragmentation across the EU.
If you would like to discuss these developments in more detail please get in touch with our Antitrust, Competition and Trade team.