Digitalization has fundamentally changed not only the market but altered our whole society. Many of these changes have benefited individuals: we are now able to communicate virtually with anyone around the world, make international transactions, and choose among a wider range of products.[1] However, notwithstanding the many benefits that digital innovation has brought, there are fears and concerns as loss of privacy, and abuse of dominance by a few online platforms.[2] Over the past decade, online platforms have established their presence as important economic players in the market by increasing efficiency, spurring innovation, and developing new business models.[3] Even though there are great benefits that come along with those platforms, it is them especially that raise new issues relating to fairness, transparency, and market distortions.[4]

In light of the above-mentioned issues, the European Commission on the 15th of December 2020 has brought forward a proposal for a Regulation on contestable and fair markets in the digital sector (hereinafter “the Digital Markets Act”).[5]The proposal is now being discussed by the European Parliament and Council, following the ordinary legislative procedure,[6] and together with the Digital Service Act,[7] it aims at creating a safer, more open and transparent digital space with European values at its centre.[8] Both proposals are part of the European Digital Strategy[9] and they represent a response to the accumulation of political, economic, and social power in the hand of big tech companies. 

The Digital Markets Act

The Digital Markets Act introduces rules for platforms that act as gatekeepers in the digital sector.[10] Gatekeepers are few large platforms that serve as an important gateway for business users to reach their customers.[11] The risk is that gatekeepers may have the power to act as private rule-makers and to function as bottlenecks between business and consumers. Having that power, their position often leads to unfair practices, lack of contestability, higher prices, and inefficiencies. Thus, addressing those problems is extremely important for the legislators. 

The Digital Markets Act is limited to a number of services defined as “core platform services.”[12] This includes a) online intermediation services, as for example App Store, b) online search engines, c) social networking, d) video sharing platform services, e) number-independent interpersonal electronic communication services, f) operating systems, g) cloud services, h) advertising services.[13] Moreover, as already mentioned, the proposal would only apply to Gatekeepers,[14]who are defined under article 3 as a provider of core platform services who satisfy the following criteria: a) the provider has a strong economic position, and significant impact on the internal market as active in multiple European countries, b) it has a strong intermediate position and it links large users base with a large number of businesses, c) it has a durable position on the market.[15] The status of gatekeepers is determined on a case-by-case qualitative assessment, and it carries a rebuttable presumption.[16] Furthermore, gatekeepers, once defined, will carry extra responsibility to conduct themselves in a way that ensures a fair online environment for businesses and consumers, by a refrain from engaging in unfair conduct listed under Chapter III of the Digital Markets Act. In case of non-compliance, gatekeepers risk a fine up to 10% of its worldwide turnover,[17] and periodic penalties amounting up to 5% of their average daily turnover.[18]

Clearlythe proposal leads to a change in the control of the online environment.[19] Numerous benefits following this act have been listed by the Commission: businesses who depend on gatekeepers will have a fairer environment and they will not easily get exploit. Moreover, smaller platforms such as innovators and technology start-apps will have more opportunities to compete, and consumers will have more choice. Lastly, gatekeepers will still have opportunities to innovate and offer new services, while being limited only in regard to unfair practises.[20] To this extent, the Commission has provided a list for dos and don’ts on its website which can be useful to check.[21]  

[1] J Cremer, Y de Montjoyer & H Schweitzer, ‘Competition policy for the digital era’ (European Commission, 2019) p.12.

[2] Ibid.

[3] Commission Staff Working Document: Impact Assessment Report Digital Markets Act, SWD(2020), OJ 364 final, para 25.

[4] Ibid para 26.

[5] Commission Regulation Proposal Digital Markets Act on contestable and fair markets in the digital sector (“Digital Markets Act”), COM(2020), OJ 842 final.  

[6] Article 294 Treaty of Functioning of the European Union (“TFEU”) OJ C 326. 

[7] Commission Regulation Proposal Digital Service Act on a single market for digital services and amending Directive 200/31/EC, COM(2020), OJ 825 final. 

[8] European Commission, ‘The Digital Service Act Package’ (European Commission website: policies), available at: last accessed 28th March 2021. 

[9] European Commission, ‘The European Digital Strategy’ (European Commission website: strategy), available at: last accessed 28th March 2021. 

[10] Commission Regulation Proposal Digital Markets Act on contestable and fair markets in the digital sector (“Digital Markets Act”), COM(2020), OJ 842 final. 

[11] Commission Regulation Proposal Digital Markets Act on contestable and fair markets in the digital sector (“Digital Markets Act”), COM(2020), OJ 842 final, p. 1. 

[12] Ibid Article 1(2). 

[13] Ibid Article 2(2).

[14] Ibid Article 1(1).

[15] Ibid Article 2(1) and Article 3. 

[16] C Caraffa & F S Morton, ‘The European Commission Digital Markets Act: a translation’ (VOXEU website, 2021) available at: last accessed 28th March 2021. 

[17] Article 26 DMA Commission Regulation Proposal Digital Markets Act on contestable and fair markets in the digital sector (“Digital Markets Act”), COM(2020), OJ 842 final.  

[18] Ibid Article 27. 

[19] J de Pree, ‘Digital Services Act and Digital Markets Act: Commission flexes its muscles’ (De Brauw, Blackstone & Westbroek website, 2020) available at: last accessed 28thMarch 2021. 

[20] European Commission, ‘The Digital Markets Act: ensuring fair and open digital markets’ ( European Commission website: A Europe fit for the digital age) available at: last accessed 28th March 2021. 

[21] See ibid.