Regulation (EU) 2022/1925 on contestable and fair markets in the digital sector (Digital Markets Act)

What it is

to ensure the proper functioning of the internal market by promoting effective competition in digital markets and in particular a fair and contestable online platform environment (Digital Markets Act). PROPOSED ACT: Regulation of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: digital services cover a wide range of daily activities including online intermediation services, such as online marketplaces, online social networking services, online search engines, operating systems or software application stores. They increase consumer choice, improve efficiency and competitiveness of industry and can enhance civil participation in society. However, whereas over 10 000 online platforms operate in Europe’s digital economy, most of which are SMEs, a small number of large online platforms capture the biggest share of the overall value generated. The Committee on the Internal Market and Consumer Protection adopted the by Andreas SCHWAB (EPP, DE) on the proposal for a regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act). The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure be amended as follows. Firstly, as a reminder, digital services in general and online platforms in particular play an increasingly important role in the economy, in particular in the internal market, by providing business users with gateways to reach end users throughout the Union and beyond, by facilitating cross-border trade and by opening entirely new business opportunities to a large number of companies in the Union to the benefit of Union’s consumers. This purpose of the proposed regulation is to contribute to the proper functioning of the internal market by laying down harmonised rules ensuring contestable and fair markets for all businesses to the benefit of both business users and end users in the digital sector across the Union where gatekeepers are present so as to foster innovation and increase consumer welfare. The proposed regulation will apply to the major companies providing so-called ‘core platform services’ most prone to unfair practices. These include online intermediation services, social networks, search engines, operating systems, online advertising services, cloud computing, and video-sharing services, which meet the relevant criteria to be designated as ‘gatekeepers’. Members also included in the scope of the digital market act web browsers, virtual assistants and connected TV. Members also amended the Commission’s proposal to increase the quantitative thresholds for a company to fall under the scope of the digital markets act to EUR 8 billion (as opposed to EUR 6.5 billion) in annual turnover in the European Economic Area (EEA) and a market capitalisation of EUR 80 billion (as opposed to 65 billion as proposed by the Commission). To qualify as a gatekeeper, companies would also need to provide a core platform service in at least…

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