EU's Digital Markets Act will come into force next spring
The Digital Markets Act aims to tackle anticompetitive practices and make it easier for small and mid-sized firms to enter markets dominated by tech giants.
The European Union will bring the new Digital Markets Act (DMA) into force in spring 2023: the first of two major new pieces of legislation aimed at curbing the power of Big Tech.
European Commission EVP Margrethe Vestager said that the EU could begin levelling enforcements against firms that violate the new Act soon after the regulation is in place.
"The DMA will enter into force next spring and we are getting ready for enforcement as soon as the first notifications come in," she said in a speech to the International Competition Network conference in Berlin.
The EU reached political agreement on the DMA "just a few weeks ago" - back in March. The regulation will target tech companies known as 'gatekeepers': firms worth more than €75 billion (£63 billion), with at least €7.5 billion (£6.3 billion) annual sales and 45 million monthly users in the EU.
While the pace of adoption is encouraging, there have been concerns that the Commission is not ready for its new enforcement role - a role that will see it assessing whether gatekeepers are sticking to the complex, detailed regulations in the DMA.
Addressing those concerns, Vestager said, "This next chapter is exciting. It means a lot of concrete preparations. It's about setting up new structures within the Commission, pooling resources from DG Comp [Directorate-General for Competition] and Cnect [Directorate-General for Communications] based on relevant experience. It's about hiring staff. It's about preparing the IT systems. It's about drafting further legal texts on procedures or notification forms. Our teams are currently busy with all these preparations and we're aiming to come forward with the new structures very soon."
Originally, the DMA was expected to come into force this year. The new longer lead time will give more time for these essential preparations, although there is likely to be criticism at allowing Big Tech to get away with violating incoming rules for longer than necessary.
The Act allows gatekeepers a three-month period to declare themselves to the Commission, and up to two additional months for the EU to confirm the designation - so there will still be a multi-month period after the DMA comes into force before any enforcement is handed down (and will the agility of centralised Big Tech find a way around the legislation in the mean time? - Ed.).
Bernd Meyring, partner in the Antirust & Foreign Investment Practice at law firm Linklaters, said:
"The DMA has sailed through the legislative process at record speed. The practical question is how quickly we will see its effects on digital markets. Gatekeepers are only likely to need to formally comply with the DMA's obligations as of the Q1 2024 at the earliest and there will undoubtedly be wrangling as to the scope of some of the more expansive obligations. But formal adoption fires the starting gun and we should now start to see what the DMA means for various business models, as gatekeepers, their counterparties and the Commission work out what the obligations entail in practice."
"Of course, this is a developing story," Vestager continued in her speech. "With the Digital Markets Act, the Commission might be slightly ahead for now, but we are all heading in the same direction. Already, other major jurisdictions are adopting digital regulation. South Korea recently adopted legislation on app stores. Other jurisdictions are considering new digital regulations. And here in Europe, Germany adopted its own digital regulation last year."
Notably, and in a surprising show of unity, the UK made its own moves to align with the DMA today - announcing new powers for the Digital Markets Unit, part of the regulator the Competition and Markets Authority.