EU Digital Markets Act delayed until 2023


The Digital Markets Act(DMA), has been delayed to come into effect in early 2023As previously predicted, it will be earlier than expected.

“The DMA will enter into force next spring and we are getting ready for enforcement as soon as the first notifications come in,” said Commission EVP Margrethe VestagerIn a speech to International Competition NetworkConference in Berlin.

Vestager explained that the delay is a result of the extended preparation process: “It’s about setting up new structures within the CommissionDG provides pooling resources Comp [Directorate-General for Competition]And Cnect [Directorate-General for Communications]Based on relevant experiences. 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.”

TheDMA was approved for the first time by EULegislators in March. WhenIn full force, the DMA will designify large tech companies such a MetaAnd AppleThese companies will be acting as gatekeepers and will have to declare their status. EUWithin three months

The criteria for these gatekeepers comprises of them being “a core platform service” with “significant” impact on the EU’s internal market; a market capitalisation of at least €75BN (or an annual turnover of €7.5BN); at least 45M monthly end users in the EUGAFAM has 10,000+ annual business users as well as a solid market position, so the usual GAFAM giants will be there. The EUThey will then have two months for confirmation.

The CommissionThey will be responsible for ensuring compliance with the regulation by these large tech companies, however VestagerAs part of preparation work, it is already being done that suggests cooperation. The CommissionInteroperability between voice-calling, messaging, and video-calling services is also required.

“ForThe next chapter will be a close collaboration with competition authorities both inside and outside the country. EU will be crucial,” Vestager emphasised. “ThisIt doesn’t matter if they use traditional enforcement tools, or have developed their own regulatory tools like the German digital regulation. CloseBecause we won’t run out of work, and because we have many new services or methods to look at, cooperation is essential. AndThe effort required on a global level is immense. So we will need to work together more than ever.”

Vestager warned, “It goes without saying that the more we, as an international competition community, are able to harmonise our approach, the less opportunity there will be for global tech giants to exploit enforcement gaps between our jurisdictions.”

PenaltiesFailure to comply with the DMA rules will result in a penalty of up to 10% of the worldwide annual turnover of the company. This could be increased if repeated violations are made.

Bernd MeyringPartner in the Antirust & Foreign Investment Practiceat Linklaters commented: “TheDMA has passed the legislative process with record speed. TheThe real question is how fast we will see its effects in 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. ButFormal adoption is the start of the firework. Now, let’s look at what the DMA means to different business models as gatekeepers, counterparties and the stakeholders. Commission work out what the obligations entail in practice.”

William LeslieCounsel in the Antitrust & Foreign Investment Practiceat Linklaters also stated: “NotAll amendments that have dominated the debates in the last month have been included in the final text of DMA. ButThe inclusion of voice assistants as well as web browsers within its scope of regulated activities, the adoption rules on interoperability among messaging services, and the imposition strict rules on obtaining user information for personalised advertising have all resulted in the final text having more teeth than the original. Commission proposal. A unique achievement in itself, and a telling indication of the direction of the current regulatory winds.”

 

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