important additions incorporated into final text – EURACTIV.com

The long-awaited final text of the Digital Markets Law, seen by EURACTIV, contains some unexpected last-minute changes.

EU co-legislators reached an agreement on the Digital Markets Act (DMA) on March 24. Since then, stakeholders have been trying to get their hands on the final text, which was refined in the greatest secrecy until its final release on Thursday 14 April.

The text is likely to be presented to the Council’s competition working group on April 28 and endorsed by EU ambassadors in the Committee of Permanent Representatives (COREPER) on May 4.

Preamble

The preamble of the text has been modified to clarify the meaning of the legal obligations and to make a legal challenge more difficult.

The text now clearly indicates that the DMA aims to ensure the contestability of all online services. A general explanation of contestability and fairness has also been added.

Contestability can be undermined even by an oligopoly of gatekeepers. In cases where competition between platforms is not possible in the short term, competition within the dominant platform should be ensured.

Unfairness is defined as “an imbalance between the rights and obligations of professional users where the access controller obtains a disproportionate advantage”. It is important to note that this concept does not exclude free services, such as search results.

Additionally, gatekeepers cannot exclude or discriminate against businesses, a key specification in light of new obligations on default settings, allowing users to choose their search engines, virtual assistants and web browsers through a screen of choice.

Default settings, sideloading, third-party apps

The document states that users should be able to uninstall all applications that are not essential to the functioning of the operating system or the device.

When sideloading, new wording has been added to ensure that third-party apps and app stores can prompt users to become their default. Council wording allowing gatekeepers to apply “duly justified” security requirements to third-party applications has been added.

Likewise, gatekeepers will need to ensure that its hardware and software are interoperable with third parties. Nevertheless, it could take the measures strictly necessary to ensure that the provision of this interoperability does not damage software and devices.

FRAND

The text states that app stores, search engines and social media gatekeepers must uphold fair, reasonable and non-discriminatory (FRAND) access to their services for business users. A “future proof” clause has been added to address unfair practices that do not yet exist but may develop in the future.

The gatekeeper should publish terms of access to explain how the FRAND terms apply to their platforms, including an alternative dispute resolution mechanism. The EU executive would check that the terms and conditions comply with the regulation.

Data Provisions

An entirely new requirement prevents gatekeepers from using the personal data of users who use the service provided by a third party when that third party service uses the gatekeeper’s platform.

The preamble explains that this measure aims to prevent Google and Facebook from tracking users who have refused their consent when they visit websites that are part of their advertising networks. The Regulation only allows requesting consent to the processing of personal data once a year.

Advertisers will be able to access aggregated and non-aggregated data for the advertisements they serve. The data must be provided so that advertisers can analyze it with their tools.

Messaging Services Interoperability

The final draft confirms that the interoperability requirements have been divided into three stages. When designating, the access controller will have to ensure that two people can exchange text messages, images, voice messages, videos and encrypted files.

Within two years, the same features should be interoperable for group chats. Interoperability will cover voice and video calls between individuals and groups by year four. After receiving an interoperability request, the gatekeeper must deliver the interoperability within three months.

The final draft gives the Commission enhanced powers to determine how interoperability should work. The EU Executive may delay the above deadline in exceptional circumstances and exempt a guardian from these obligations if it is in the public interest.

On the basis of a market investigation, the Commission could impose new obligations, add or remove functionalities or specify how interoperability should work via secondary legislation.

Anti-bundling and circumvention

The text deleted any reference to “auxiliary” support services. Thus, anti-bundling measures, to prevent gatekeepers from linking different services together, refer only to identification systems, payment systems and web browsing engines.

A change to the text’s preamble now requires business users to only contact an end user once the gatekeeper has been directly or indirectly compensated. This is to prevent professional user “free ride” marketplaces like Booking from transacting directly with the customer.

Participation of third parties

The text requires the Commission to facilitate the involvement of third parties when engaging in regulatory dialogue and investigations of systemic non-compliance.

Chronology

The DMA is expected to pass next month, which means it will come into effect in October 2022. Then it will take six months to apply, until April 2023. The designation process will begin, which could take up to the end of summer 2023. From there, the regulatory dialogue would formally begin. Finally, the compliance process will begin around the first quarter of 2024.

[Edited by Nathalie Weatherald]

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