The 6 Gatekeepers under Digital Markets Act (DMA)

Last year, the European Commission (EC) officially designated six major tech companies - Alphabet (Google), Amazon, Apple, ByteDance (TikTok), Meta (Facebook, Instagram, WhatsApp), and Microsoft - as "gatekeepers" under the Digital Markets Act (DMA).

Was the first time EC has exercised its regulatory muscle under this new legislation, which aims to curb the dominance of Big Tech and give users and smaller businesses more choice within the digital landscape.

Today, EC announced it has launched a major crackdown on the business practices of Big Tech giants, opening formal antitrust investigations against Alphabet (Google), Apple, and Meta (Facebook).

The DMA introduces the concept of a "gatekeeper" - a digital platform that wields significant market power and acts as a crucial gateway between businesses and consumers. These gatekeepers can have immense control over digital markets, potentially limiting competition, stifling innovation, and reducing consumer options. The DMA is a key piece of European legislation designed to counteract this market dominance and create a more equitable digital landscape.

What means to be a Gatekeeper?

With their designation as gatekeepers, these six tech giants must comply with a stringent set of obligations within six months. The DMA lays out clear "do's and don'ts", which include measures to:

• Prevent self-preferencing: Gatekeepers can no longer give preferential treatment to their own services or products over those of competitors.
• Promote interoperability: Ensure messaging services, social networks, and other core platforms are compatible, giving users more options to communicate and connect across services.
• Data portability: Enable users to easily move their data between different platforms, breaking the barriers of vendor lock-in.
• Fair App Store practices: Guarantee fair conditions for third-party apps and app stores so they can compete effectively.

Failure to comply could result in fines of up to 10% of the company's worldwide turnover, or up to 20% in case of repeated violations. If a gatekeeper systematically disregards the rules, the EC could impose even harsher remedies, potentially forcing the company to sell business segments or even ban certain acquisitions.

The DMA entered into force in November 2022 and became fully applicable in May 2023. It works in tandem with the Digital Services Act (DSA), which targets the spread of illegal content and societal harms caused by major online platforms. Together, these regulations represent a significant shift in the EU's approach to regulating the digital sphere.

Reactions and Implications

The EC's bold designations under the DMA have been hailed by consumer groups and smaller businesses who have long felt disadvantaged by the dominance of Big Tech companies. This move could bring about:

• Greater consumer empowerment: More choice, easier data transfers, and less platform dependence.
• Improved market conditions: Leveling the playing field for smaller and innovative companies, allowing them to compete fairly with industry giants.
• Reshaped digital landscape: Potential changes in advertising models, increased cross-platform compatibility, and fairer app marketplaces.

Tech companies have expressed a mix of acceptance and concern. While complying with the DMA is in their best interest, some argue that the regulations might impede innovation and hinder their ability to offer popular services.

The EC's actions are likely to have far-reaching global implications. Other jurisdictions may adopt similar measures to rein in the power of Big Tech, ultimately leading to a worldwide transformation of the digital economy with a greater emphasis on fairness and competition.