EU: Council and Parliament reach agreement on Digital Markets Act - DMA.

The Council of the European Union announced, on 25 March 2022, that it had reached a provisional political agreement on the Digital Markets Act ('DMA'). In particular, the Council highlighted that the DMA aims to make the digital sector fairer and more competitive by defining clear rules for large online platforms, and ensuring that such platforms acting as gatekeepers for a large number of users do not abuse their position to the detriment of companies wishing to access such users.

Notably, the Council outlined that it had agreed with Parliament that for a platform to qualify as a gatekeeper, firstly it must:

• either have had an annual turnover of at least €7.5 billion within the EU in the past three years or have a market valuation of at least €75 billion;
• have at least 45 million monthly end users and at least 10 000 business users established in the EU; and
• control one or more core platform services (including marketplaces and app stores, search engines, social networking, cloud services, advertising services, voice assistants and web browsers) in at least three Member States.

Furthemore, the Council highlighted that it had agreed with Parliament that SMEs will be exempt from being identified as gatekeepers, apart from in exceptional cases, whilst also noting that in order to ensure the progressive nature of the obligations, the category of 'emerging gatekeeper' is also provided for, enabling the imposition of certain obligations on companies whose competitive position is proven but not yet sustainable.

The Council further outlined that agreed obligations for gatekeepers include the following:

• to ensure that users have the right to unsubscribe from core platform services under similar conditions to subscription;
• for the the most important software (e.g. web browsers), to not require this software by default upon installation of the operating system;
• to ensure the interoperability of their instant messaging services' basic functionalities;
• to allow app developers fair access to the supplementary functionalities of smartphones;
• to give sellers access to their marketing or advertising performance data on the platform; and
• to inform the European Commission of their acquisitions and mergers.

Additionally, the Council specified that the agreement includes that gatekeepers will be prohibited from:

• ranking their own products or services higher than those of others (self-preferencing);
• reusing private data collected during a service for the purposes of another service;
• establishing unfair conditions for business users;
• pre-installing certain software applications; and
• requiring app developers to use certain services (e.g. payment systems or identity providers) in order to be listed in app stores.

In terms of penalties for infringements of the above, the Council noted that fines of up to 10% of a gatekeeper's total worldwide turnover, or in the case of a repeat offence, 20% of its worldwide turnover, had been agreed. Additionally, the Council outlined that if a gatekeeper systematically fails to comply with the DMA, i.e. it violates the rules at least three times in eight years, the European Commission will be able to open a market investigation and, if necessary, impose behavioural or structural remedies.

In terms of next steps, the Council indicated that final technical work will make it possible to finalise the text in the coming days. In addition, the Council outlined that the provisional agreement reached is now subject to approval by the Council and the Parliament, whilst noting that it intends to submit the agreement to the Permanent Representatives Committee shortly.

(Source: Data Guidance - One Trust).