With the adoption by the European Parliament of the Digital Markets Act (DMA) and the Digital Service Act (DSA) last July, the legislative process that began in 2020 with the European legislator’s proposal for a strategic digital project (also referred to as the ‘Digital Service Package’) unanimously approved in 2021 by the Member States was concluded.

The aim of this legislative package is to delimit the operating space of digital giants, also known as the ‘giants of the digital ecosystem’ (e.g. Google, Apple, Facebook, Microsoft), and encourage new spaces for small and medium-sized competitors.

Digital Market Act (DMA)- EU Regulation 2022/1925

Regulation 2022/1925 was published in the Official Journal on 12 October 2022 and will enter into force on 1 November 2022.

In the recitals of the Regulation, it is pointed out that the reference market is characterised, on the one hand, by the presence of growing small and medium-sized companies operating as online platforms, and, on the other hand, by the presence of a few large platforms that alone hold the largest market share, thus exercising a control of the access, the so-called gatekeepers. The rules contained in the DMA therefore aim to ensure fair competition on digital platforms by establishing both obligations and prohibitions for gatekeepers.

First of all, the DMA identifies qualitative and quantitative criteria on the basis of which it is possible to determine whether an entity is to be considered a gatekeepers. In summary, an undertaking that provides basic platform services is to be considered a gatekeepers if ‘(a) it has a significant impact on the internal market; (b) it provides a core platform service which is an important gateway for business users to reach end users; and (c) it enjoys an entrenched and durable position in its position or it is foreseeable that it will enjoy such position in the near future’. A company is presumed to satisfy these requirements if it has an annual turnover of at least EUR 7.5 billion or if its market capitalisation was at least EUR 75 billion and if it provides the same core platform service in at least three Member States; if it has at least 45 million active monthly end-users and at least 100,000 EU-based business users in its last financial year.

Then, the Regulation provides for a set of obligations imposed upon gatekeepers listed in Articles 5, 6 and 7. In particular, these shall have to guarantee users the right to unsubscribe from core subscription services under the same conditions as the subscription, not impose software (such as web browsers) by default on the operating system installation, and ensure interoperability of the core functionalities of their instant messaging services and report to the European Commission on their acquisitions and mergers.

The Regulation then provides investigative power for the European Commission, which will adopt an implementing act, specifying the measures that the gatekeeper concerned is to implement in order to effectively comply with the obligations laid down in Articles 6 and 7.

Digital Service Act (DSA) – Proposal for a Regulation

On 4 October, the European Council finally approved the DAS, which will enter into force 20 days after its publication in the Official Journal and will be directly applicable throughout the EU starting 1 January 2024.

The act introduces new rules on transparency, disclosure requirements and accountability with the aim of balancing the rights and responsibilities of users, online intermediaries and public authorities.

It applies to intermediaries offering services for remuneration, at a distance, electronically and at the request of the customer, so-called information society services. The obligations are tailored to the different types of services offered and the size of the operator: large online platforms will be bound to more stringent requirements.

In particular, obligations of due diligence and procedures for the removal of illegal content and for the protection of the fundamental rights of online users will be foreseen, such as, for example, a mechanism that will allow users to easily report illegal content; obligations on the traceability of commercial users in online markets to help identify illegal sellers.

This also provides the European Commission with a power of supervision over bigger online platforms.

Anna Colmegna