Digital, the European law on platforms enters into force

Digital

The Digital Services Act (Dsa), the European Union law on digital markets, comes into force today. The new regulation will put an end to the unfair practices of companies acting as gatekeepers in the online platform economy. It was proposed by the Commission in December 2020 and approved by the European Parliament and the Council in record time, in March 2022.

The Digital Markets Act defines the situations in which a large online platform is a "gatekeeper" ". These are digital platforms that serve as an important entry point between business users and consumers and have a position from which they can dictate the rules and create a bottleneck in the digital economy. To address these issues, the Digital Markets Act will define a number of obligations for gatekeepers, including a ban on certain behaviors.

How to identify a gatekeeper Companies that operate one or more of the so-called "core platform services" listed in the Digital Markets Act are designated as gatekeepers if they meet the requirements described below. The services are: online brokerage services such as software application stores, online search engines, social networking services, some messaging services, video sharing platform services, virtual assistants, web browsers, cloud computing services, systems marketplaces, online markets and advertising services.

There are three main criteria for considering that a company falls within the scope of the law on digital markets.

A dimension that has an impact on the internal market: when the company achieves a certain annual turnover in the European Economic Area (EEA) and provides a basic platform service in at least three EU Member States; control of important end consumer access for business users: when the enterprise provides a basic platform service to at least 45 million active end users on a monthly basis established or located in the Union and at least 10,000 active business users on a annual established in the Union; a consolidated and lasting position: whether the company has met the second criterion in each of the last three years.

A clear list of obligations and prohibitions

The Digital Markets Act establishes a list of obligations and prohibitions that gatekeepers will have to comply with in their daily operations to ensure fair and open digital markets. This improves the chances for companies to compete in markets and compete with gatekeepers on the merits of their products and services, broadening the scope for innovation.

Practices of a gatekeeper how to foster their services or preventing commercial users of their services from reaching consumers can eliminate competition, resulting in less innovation, less quality and higher prices. When a gatekeeper engages in unfair practices, for example by imposing unfair conditions for access to their online software application store or preventing the installation of applications from other sources, consumers are likely to pay more or are deprived of the benefits that the alternative services could have contributed.

Next steps

With its entry into force, the law on digital markets will move to the crucial stage of implementation. Effective application will begin in six months, starting May 2, 2023. In the next two months and no later than July 3, 2023, prospective gatekeepers will have to notify the Commission that they provide core platform services if they reach the thresholds set by the Digital Markets Act.

Once complete notification is received, the The Commission will have 45 working days to assess whether the firm meets the thresholds and designate it as the gatekeeper (i.e., for a notification submitted when the deadline expires, by September 6, 2023). Following this designation, gatekeepers will have six months to comply with the requirements of the Digital Markets Act, at the latest by March 6, 2024.

In preparation for the application of the Digital Markets Act, the The Commission is already proactively engaging industry stakeholders in discussions to ensure effective compliance with the new rules. In addition, the Commission will organize a series of technical seminars with stakeholders in the coming months to assess third party views on compliance with gatekeepers' obligations under the Digital Markets Act. The first of these seminars will take place on December 5, 2022 and will focus on the provision relating to the prohibition for the gatekeeper to offer more favorable treatment to their products and services. Finally, the Commission is also preparing an implementing regulation with provisions on the procedural aspects of notification.