Today, the large digital platforms that have been designated by the European Commission as “gatekeepers” must start to comply with the Digital Markets Act (or DMA). This marks a milestone for businesses operating in the EU because the DMA will resolve many challenges they face in their relations with gatekeepers, such as lack of access to data, limited interoperability, and unfair contractual terms.
The Commission has designated as gatekeepers Amazon, Apple, Google, Meta, Microsoft, and ByteDance for the following services:
The above services are now subject to a series of obligations and prohibitions. For example, Apple and Google, which have been designated for the App Store and the Play Store respectively, must allow end users to install on their devices other app stores, and to directly download apps from the web. Google and Apple must also allow app developers to use alternative payment service providers or include a link-out to purchase in their app. Google and Apple must further provide to app developers access to user data, effective interoperability with their hardware and operating systems, and access to their app stores on fair, reasonable and non-discriminatory terms. The way they rank should not favor their own apps and they cannot use the data they collect from app developers to compete with them in other markets (e.g., music streaming). These obligations and prohibitions apply to the other services that have been designated, such as Meta’s social networks, Google Search, and YouTube.
The DMA requires gatekeepers to submit to the Commission their DMA compliance plans by today. Summaries of those compliance plans, which set out how gatekeepers intend to implement the DMA, will be made publicly available to increase transparency and facilitate monitoring by businesses the DMA protects.
While gatekeepers have certainly taken steps to implement the DMA, there is no guarantee that their compliance plans fulfil their DMA obligations. For instance, Apple’s proposed compliance plan (which was made public on 25 January 2024) has sparked significant criticism from app developers. It is likely that the compliance plans of other gatekeepers will also miss the mark.
If gatekeepers’ compliance plans do not comply with the DMA, what can business users do to defend their rights? Their different options are set out below.
Addressing concerns with the European Commission
The most direct way for a business user to ensure the proper implementation of the DMA is to engage with the Commission’s DMA team. While the DMA does not establish a formal complaint procedure, the Commission can start enforcement proceedings based on information received from third parties. Unlike in competition law, these proceedings are subject to strict time limits as they need to be completed within 12 months.
If the Commission decides that a gatekeeper does not comply with the DMA, it has different options at its disposal. For example, it may issue a cease-and-desist order, requiring the gatekeeper to discontinue the problematic conduct. The Commission may further oblige the gatekeeper to behave in a certain manner (e.g., to establish a user-friendly mechanism that facilitates data sharing), or to divest part of its business. The Commission can further impose hefty fines, which may amount to 10% of the gatekeeper’s annual worldwide turnover (or even 20% in the case of repeated offences). Put simply, failure to comply with the DMA will affect gatekeepers’ business, especially where third parties provide to the Commission the relevant supporting evidence.
Addressing concerns with National Competition Agencies (NCAs)
The Commission is the “sole enforcer” of the DMA. That means that only the Commission can initiate formal proceedings. However, the DMA envisages a role for NCAs, which may assist the Commission in its enforcement tasks. Businesses that have concerns over non-compliance with the DMA can file a complaint with the NCA. If the NCA determines that there is an issue of non-compliance, it will transfer the information to the Commission.
An NCA may also investigate non-compliance with the DMA on its own initiative. There is, however, a catch: the NCA only has this power if the national legislator has decided to grant such powers. Recently, the Dutch and German governments have decided to grant to their NCAs the power to conduct such investigations.
As the Commission is the sole enforcer of the DMA, if it launches its own investigation, the NCA must end its inquiry. If the Commission does not launch its own investigation, then the NCA can finish its inquiry by reporting its findings to the Commission, which may then adopt a decision that is binding on the gatekeeper.
This power for NCAs may look toothless, given their inability to adopt decisions that the DMA has been infringed. However, NCAs maintain their ability to enforce competition rules. Therefore, even if the Commission decides not to act, the NCA may still launch its own investigation into whether the gatekeeper has abused its dominant position under Article 102 TFEU (and the national equivalent).
NCA inquiries may also serve to apply pressure on gatekeepers to change their behaviour (and on the Commission to act). The threshold for complainants to approach their “local” NCA can be lower than taking a complaint straight to Brussels.
Bringing a claim before a national court
In addition, the DMA is an EU Regulation with “direct effect”. This means that it is possible for business users to defend their DMA rights before the national courts. For example, if a business user is suffering harm from an infringement of the DMA, this infringement can give rise to a private action against the gatekeeper in court (e.g., a claim for the harm/damages suffered).
In appropriate cases (e.g., where the public authorities do not have sufficient resources to investigate the infringement), if immediate action to stop harm to a business user is needed, or if a business user wishes to claim compensation for damages caused by an infringement of the DMA, an action before national courts can be the right step to take.
The DMA does not contain specific provisions on the procedure before national courts. This is instead governed by national procedural laws (some of which have been harmonized at the EU level). The court in the jurisdiction where the gatekeeper is based will generally be competent to hear a claim against that gatekeeper. In addition, the courts for the place where the harmful event occurred or may occur (e.g., where a business user is based) have jurisdiction. Where multiple businesses are bringing claims in a coalition, a court that has jurisdiction in one claim may also accept jurisdiction over the other claims. In practice, we expect that some courts will be more welcoming to DMA cases than others. There are courts that are already well-versed in dealing with large international competition cases, such as the courts in the Netherlands, Germany, France and Spain.
Where there is a choice, for example because a gatekeeper is domiciled in Ireland, such that the Irish courts have jurisdiction, but the harmful event occurred in the Netherlands, such that the Dutch courts also have jurisdiction, it will be important to consider which court has more experience to hear complex cases involving the regulation of digital markets.
It is important to carefully review any exclusive jurisdiction clauses in contracts with gatekeepers. Depending on how these are worded, they may mean, for example, that the courts in one EU Member State alone are competent to hear the claim. Some claims may, however, relate to compliance with the DMA, which may mean that the jurisdiction clause in the contract is not applicable to it. In such a case, the claim arises from the breach of the gatekeeper’s statutory duty, and the business user seeks protection against the harm this breach causes. This would not be a claim linked to the contractual relationship with the gatekeeper.
Conclusion
In a nutshell, the DMA imposes on gatekeepers several obligations and prohibitions that will change how businesses established in the EU interact with tech giants. To reap the benefits the DMA creates, businesses can file a complaint with the Commission or their NCA. They can also file a claim before a national court and request damages for the harm the gatekeepers caused.
The DMA is a new piece of regulation that governs complex technical aspects and commercial practices. As a result, the Commission will be on a steep learning curve in ensuring its effective implementation. However, we should not forget that the DMA has changed the rulebook and businesses that rely on gatekeepers to reach consumers will have an extra tool in their kit that does not require the completion of decade-long investigations that are effects-based.
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