From 7 March 2024, Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft must comply with all the obligations of the Digital Markets Act. What it demands of the ‘gatekeepers’ and what changes for the businesses that use them.
On 7 March 2024 the adjustment period for the Digital Markets Act (DMA), Regulation (EU) 2022/1925, ends. From that day, the six ‘gatekeepers’ designated by the European Commission in September 2023 (Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft) must comply with all the obligations of the law in their designated core platform services, which number 22 according to the Commission.
What a gatekeeper is
The DMA has applied since 2 May 2023 to platforms that act as an unavoidable gateway between businesses and consumers. A company is presumed to be one if it meets three criteria: it has a size that affects the internal market (annual turnover in the European Economic Area of at least €7.5 billion in each of the last three financial years, or an average market capitalisation of at least €75 billion), it controls an important gateway (more than 45 million monthly end users and more than 10,000 yearly business users in the EU) and it holds that position on a lasting basis. A company can rebut the presumption, and the Commission can designate others after a market investigation.
What they must do from today
The law imposes lists of dos and don’ts. They include: not favouring their own products in results and rankings, not combining personal data from different services for advertising without clear consent, allowing the installation of third-party apps and app stores, giving business users access to the data they generate, giving advertisers and publishers information on how their advertising is used, making basic interoperability of messaging services possible, and not stopping businesses from steering customers to offers outside the platform or requiring them to match their prices on other channels.
Each gatekeeper must submit to the Commission a report showing compliance and describing the measures taken, with a public version, together with an independently audited description of the techniques it uses to profile consumers. The Commission has said it will analyse the reports, listen to stakeholders, including workshops at which companies present their solutions, and assess whether the measures are effective.
Some companies have already announced changes. Apple said on 25 January that, from iOS 17.4, it would allow alternative app stores in the EU, a move it framed as its adaptation to the DMA; its financial terms have drawn criticism from some developers.
What happens if they do not comply
Non-compliance can cost up to 10% of a company’s worldwide annual turnover, and up to 20% if repeated, plus periodic penalty payments of up to 5% of average daily turnover. For systematic infringements, the Commission can impose, as a last resort and after a market investigation, structural remedies such as selling part of the business. Executive Vice-President Margrethe Vestager said on 7 March that the law now applies to all the gatekeepers designated half a year ago, and Commissioner Thierry Breton said it allows large platforms that do not comply to be sanctioned.
The DMA should not be confused with the fine the Commission imposed on Apple on 4 March: €1.84 billion for preventing music streaming apps from telling users in the App Store about cheaper subscriptions outside it. That is a competition-law decision, for abuse of a dominant position, and Apple said it would appeal. It operates in the same territory that the DMA seeks to regulate in advance.
For businesses here that sell through large platforms, advertise on them or publish apps, the DMA opens up specific rights: access to their data, freedom to steer customers to their own website and to offer different prices on other channels, and more transparency in advertising. It is worth reviewing the contract terms with these platforms and any notices of change received in the coming weeks. Ask your legal adviser how it applies to your case. Real compliance will become clear when the Commission analyses the reports.
The DMA does not change the rules for just six companies: it changes them for those who depend on them.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
