A year of public discussion and debate on the European Union’s proposed Digital Markets Act (DMA) has highlighted unique challenges posed by a handful of large digital platforms that operate as gatekeepers, intermediating the relationship between businesses and their customers. We have consistently supported the European Union’s efforts to adopt uniform, forward-looking regulation, ensuring that gatekeepers, including Microsoft, operate fairly and without undermining the ability of others to compete. We continue to do so.
On 15 December, the European Parliament will hold a plenary vote on the DMA, finalizing its position – as the Council did – in record time. Before the DMA proposal moves into the next stage of trialogue discussions with the European Commission, we offer a few observations for consideration.
First, it is critical that the DMA remains focused on its goal: addressing the unique challenges posed by gatekeepers. It is not a general regulation, intended to broadly police the business practices of large technology companies. Accordingly, efforts to expand the scope of the DMA beyond gatekeepers should be avoided. Such an expansion into areas unrelated to the core concerns underlying the DMA threatens to unravel its coherence, complicate implementation, and undermine its effectiveness, harming innovation and contestability in the process.
Second, the desire for speed should be carefully balanced against the need for effectiveness. The Commission’s original proposal included tight deadlines for designating gatekeepers and complying with the obligations. These deadlines were ambitious, given how much work the Commission will need to do to implement and operationalize the DMA and what gatekeepers will need to do to interpret and apply the obligations. Amendments that suggest to further reduce the time necessary to make reasoned decisions and to comply, will complicate and undermine the ability of the Commission and gatekeepers to get to the right solutions under the law.
Finally, gatekeepers will inevitably need further guidance on how to comply with the DMA obligations. Many open questions will need to be resolved around how the general obligations of the DMA should apply across the specific platform services covered – which differ significantly in their design, operations, and business models. The Commission, and key stakeholders, should have an opportunity to weigh in early. If the process of identifying and discussing concrete solutions only begins after an infringement decision, fines, and lengthy litigation, then self-enforcement under the DMA won’t be faster than traditional competition law enforcement. Upfront guidance – through a structured process of regulatory dialogue – on the measures that gatekeepers intend to take to comply with the DMA, will contribute to its effectiveness and durability. The Commission should engage in a regulatory dialogue with a view to tailoring the obligations to the gatekeeper in question, as well as providing guidance on compliance measures.
With the DMA, the European Union will once again take the lead in the global discussion on how to reign in the power of large gatekeeping platforms in a way that is fair and non-discriminatory. By staying focused and making the DMA effective, Europe will make a significant contribution to the fairness and contestability of digital markets globally. This will ensure that the tech sector adapts to Europe, not the other way around, which for us is the essence of Tech Fit 4 Europe.