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Digital Markets Act: Commission’s expectations on timeframes clarified

Out-Law News | 09 May 2022 | 12:21 pm | 1 min. read

The European Commission anticipates the EU Digital Markets Act (DMA) taking effect in spring 2023, Out-Law can confirm.

The DMA, agreed on by EU law makers earlier this spring, will govern the activities of online ‘gatekeepers’, regulate how businesses access gatekeeper platforms, provide internet users with new rights to uninstall pre-loaded apps, and place fresh restrictions on the use of users’ personal data. Gatekeepers are businesses operating platforms that are considered to be a gateway for smaller businesses to reach the end consumer.

The DMA was originally proposed by the European Commission in late 2020. The Commission’s draft was subsequently scrutinised and amended by the European Parliament and Council of Ministers, the two EU law-making bodies, but despite agreeing on the wording of the text in March, those bodies have yet to formally adopt the DMA.

In a recent speech, EU competition commissioner Margrethe Vestager said the DMA “will enter into force next spring”. That phrasing appears to have caused some confusion as to whether the DMA is being delayed. According to the Commission’s original draft, a 2022 start period for implementation was envisaged. However, the confusion appears to stem from the difference between the date on which the DMA will formally come into force and when many of its provisions will take effect.

The DMA will first come into force 20 days after its publication in the Official Journal of the EU (OJEU), though many of its provisions will only begin to apply six months later. A spokesperson for the Commission has confirmed to Out-Law that, subject to the adoption of the DMA by the Parliament and Council, the Commission hopes the DMA will come into force “this autumn” and for the provisions to then take effect in spring 2023 – a timescale that is in line with recent understanding.

The Commission will be responsible for enforcing compliance with the DMA. Criteria is set within the legislation for determining which services businesses offer fall subject to the DMA’s rules. The Commission has powers to designate businesses as gatekeepers should a company reject the notion that they fulfil the criteria for regulation. According to Euractiv, it could be early 2024 before compliance with the DMA is properly assessed and enforced.

Gatekeepers face sanctions for violating the DMA, including potential fines of up to 10% of their global annual turnover. For repeat offences, the penalty could increase to 20% of global annual turnover. If a gatekeeper violates the new rules three times or even more, the Commission could impose a temporary ban on mergers for the business or impose divestment requirements.