Last March 24th, the European Commission approved the establishment of the Digital Markets Act. After less than 1,5 years of negotiations, it is a feat of efficiency for Europe, usually criticized for its slowness. This text provides a strict regulation of “gatekeepers”, for free competition. Customs Bridge explains to you why this step forward is crucial for the sector and for the Union.
The Digital Markets Act is a text that plans to regulate the action of digital giants by assigning them to European standards. In concrete terms, platforms qualified as “gatekeepers” and meeting certain conditions (as the achievement of an annual turnover of at least €7.5 billion) will have to offer more freedom to their users:
No more excessive exploitation of monopolies, imposition of search engines or applications, incompatibility of messaging services, pressure to be listed in app stores, recovery of user data without their explicit consent, etc…
The objective is to restore fair competition against the American digital conglomerates, especially for European SMEs that had to meet the requirements of their platforms.
To enforce this directive, the commission plans to hit hard. Indeed, fines of up to 10% of the global GDP of companies, 20% in case of recidivism, are planned. Thus, record fines might be inflicted in years to come.
The regulation, which should be implemented in the next four months, occurs in the context of an overwhelming rise in power of the GAFAMs (Google, Apple, Facebook, Amazon, Microsoft) : Microsoft’s market capitalization having for instance reached $2,500 billion last January, the equivalent of the French GDP!
After the semi-failure of the GAFA tax and the inability of the United States to regulate their own digital companies, this text revolutionizes the control of these powerful groups.
Although the Commission has appointed a committee of experts to enforce this measure, it will have to face the lobbying of the digital giants, who have much to lose. Whistle the DMA is a great achievement on its own, it must be well-respected and controlled for Europe to assert itself as a normative power. The next few months will therefore be crucial for the future of the European model.