EU regulation on digital access control platforms should be adopted


March 28, 2022

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The European Union has reached political agreement on its landmark Digital Markets Act (DMA) legislation. EU-wide DMA will apply Besides to the rules of competition law and targets the largest digital platforms. Legislation that introduces broad regulation of digital markets is expected to be formally adopted in the coming weeks and will come into force in early 2023.

The DMA is one of the most important pieces of EU economic legislation in recent times. It will impose a wide range of upfront and legally binding conduct obligations (do’s and don’ts) on businesses operating in the EU whose products are considered an important gateway for businesses to reach consumers (gatekeepers) . The impact of DMA on European digital markets will be significant both because of the breadth of products that will be covered and because of the number of obligations that will apply.

It’s not just goalkeepers who need to take notice. All businesses operating in the digital space should be fully aware of the implications of DMA as it will likely have a direct or indirect impact on their business operations. They will need to implement a multi-faceted plan in product design, business strategy and engagement with government. They will also need to take into account the interaction between the DMA and other competition and regulatory initiatives, both in Europe and globally. Companies whose products are affected by DMA will need to ensure that they comply with all relevant obligations, while companies that are not affected by DMA will need to adapt to changes in the business environment that DMA will cause. .

Which is new?

There has been broad agreement between EU Member States and the European Parliament on the principles of DMA since the European Commission proposed the legislation in December 2020. Recent discussions have focused on: (1) thresholds turnover and market capitalization that would apply for companies to be subject to the DMA; (2) what products would be covered; (3) the precise nature of certain obligations; and (4) how the DMA would be applied. On these points:

  • The quantitative thresholds for a company to be caught have gone from an annual turnover of 6.5 billion euros in the European Economic Area (EEA) to 7.5 billion euros, and from a global market capitalization from 65 billion euros to 75 billion euros.
  • Browsers and virtual assistants have been added as products to which DMA obligations will apply.
  • Some of the obligations gatekeepers will need to meet have been expanded, including with respect to: (1) interoperability between messaging services; (2) a requirement to have a consumer choice screen when an end user first uses a search engine, virtual assistant, or browser; (3) an extension of the provisions of the “most favored nation” parity clause; and (4) a requirement for fair access terms for search and social media (this requirement previously only applied to app stores).
  • While the European Commission will remain ultimately responsible for the application of the DMA, the competition authorities of EU Member States will play a supporting role.

Why should your business care?

The DMA will regulate the behavior of so-called “gatekeepers” who operate “basic platform services” that have a significant impact on the EU market. A company can be designated as gatekeeper for one or more core platform services. The DMA contains a broad list of what core platform services are, but the DMA’s obligations would only apply if a core platform service is an important gateway for business users to reach the end users in the EU. The primary way this designation will occur is through quantitative thresholds based on: (1) company size (EEA revenue and global market capitalization); and (2) product reach (number of active end users and active end users in the EEA for each core platform service).

Once a core platform service is designated as a gatekeeper, it must comply with any DMA obligations that may apply to that product. There are 18 obligations in total, some of which are vague and cover a wide variety of different provisions, including data access, interoperability and self-preference.

Controllers should care about this as they will have to comply with the relevant obligations. Since gatekeepers are not specifically defined, companies need to check whether their products can be captured, now or in the future, and if so, what they should do. If not, your business may still be affected, either because it is dealing with a gatekeeper, or because certain obligations are unclear and may have a number of consequences – intended and unintended – in digital markets. The DMA is an attempt to rapidly implement broad-based regulation and it will lead to a high degree of uncertainty in digital markets for years to come.

The following Gibson Dunn attorneys prepared this Client Alert: Christian Riis-Madsen, Nicholas Banasevic and Mairi McMartin.

Gibson Dunn attorneys are available to help answer any questions you may have regarding the issues discussed in this update. For more information, please contact the Gibson Dunn attorney you usually work with, any member of the firm’s Antitrust and Competition practice group, or the following:

Nicholas Banasevic – Managing Director, Antitrust & Competition Group, Brussels (+32 2 554 72 40, [email protected])

Christian Riis-Madsen – Co-President, Antitrust & Competition Group, Brussels (+32 2 554 72 05, [email protected])

Ali Nikpay – Co-Chairman, Antitrust & Competition Group, London (+44 (0)20 7071 4273, [email protected])

Rachel S. Brass – Co-Chair, Antitrust & Competition Group, San Francisco (+1 415-393-8293, [email protected])

Stephen Weissman – Co-Chair, Antitrust & Competition Group, Washington, DC (+1 202-955-8678, [email protected])

© 2022 Gibson, Dunn & Crutcher LLP

Publicity for Lawyers: The attached materials have been prepared for general information purposes only and are not intended to be used as legal advice.


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