The Digital Markets Act and the Digital Services Act Recap and latest updates

Published on 31 March 2023

The question

What are the latest updates to the Digital Markets Act (DMA) and Digital Services Act (DSA)? What has the journey looked like so far?

The background

On 15 December 2020, the EU Commission published draft proposals for its digital services package, made up of two regulations, the DMA and the DSA. Both pieces of legislation intend to regulate the responsibilities of digital platforms and service providers, making them safer and more open to innovation and competition. 

In July 2022, the European Parliament formally adopted these regulations, and the official texts have been published in the Official Journal of the European Union (OJEU). For further details see our Autumn 2022 Snapshot here

The Digital Markets Act

1 November 2022

DMA entered into force

Most of the provisions apply from 2 May 2023. After that, within two months and at the latest by 3 July 2023, potential gatekeepers will have to notify their core platform services to the Commission if they meet the thresholds established by the DMA.

Once the Commission has received the complete notification, it will have 45 working days to make an assessment as to whether the undertaking in question meets the thresholds and to designate them as gatekeepers. For the latest possible submission, this would be by 6 September 2023.

Following their designation, gatekeepers will have six months to comply with the requirements in the DMA, at the latest by 6 March 2024.

2 November 2022

Gatekeeper notification forms

Article 3 sets out the qualitative and quantitative thresholds for a digital business to be considered a gatekeeper. It specifies that gatekeepers would have an annual EU turnover above 7.5bn ($7.4bn), or an average market capitalisation of least 75bn in the past year. They would also provide a core platform service with at least 45m monthly EU end users, and at least 10,000 yearly EU business users.

Big Tech companies are likely to be designated as gatekeepers under the DMA.

5 December 2022

Self-preferencing workshop

With so much to achieve in such a short period of time, the Commission has been reaching out to the Tech sector via a series of workshops. The first of those workshops, on 5 December 2022, dealt with the prohibition on self-preferencing in Article 6(5) DMA and focused on the interpretation of the provision as well as possible solutions to ensure compliance with it in practice.

9 December 2022

The Commission launches a public consultation on the implementation of the DMA

Large digital gatekeepers will have to submit detailed information to the European Commission on each of their distinct platform services that will fall under the DMA.

The European Commission sought feedback by 6January 2023 on the detailed provisions that will implement the DMA, setting out what information each gatekeeper will have to provide and in what format to trigger the obligations under the DMA.

16 January 2023

New DMA directorate in place headed by Alberto Bacchiega

According to the Commission’s website, the new department, populated by 32 officials, will work together with enforcers from the commission’s digital division to rein in Big Tech companies with new rules regulating self-preferencing, interoperability or data processing under the DMA. The division will also run standard antitrust investigations into the digital sector.

27 February 2023

Interoperability workshop

Messaging platforms attend European Commission workshop to discuss implementation of interoperability between messaging services.

 

The Digital Services Act

27 October 2022

The DSA was published in the OJEU

Regulation (EU) 2022/2065 (DSA) was published in the OJEU, entered into force on 16 November 2022 and applies from 17 February 2024.

Article 92 of the DSA provides that for very large online platforms (VLOPs) i.e. those with more than 45m monthly active EU users, and very large online search engines (VLOSEs) (designated as such by the European Commission), the regulations will apply from four months after they have been notified as being designated as such by the European Commission, even where this was earlier than 17February 2024. Platforms were required to submit their user numbers by 17 February 2023.

On 19 December 2022, Thierry Breton announced that the regulator will designate the VLOPs by May2023 – four months ahead of the stated enforcement deadline of 1 September. 1 May is a holiday for commission staff, so if they follow Breton’s prescription of “no later than” 1 September, the commission will most likely designate the VLOPs by 28 April 2023.

22 November 2022

The European Centre for Algorithmic Transparency

The European Commission announced the setting up the European Centre for Algorithmic Transparency (ECAT), expected to be fully operational in the first quarter of 2023, following the entry into force of the DSA.

The DSA calls for increased oversight of the algorithmic systems used by very large online platforms and search engines. This includes how they moderate content and propose information to their users.

The new Centre will support the Commission in assessing whether the functioning of such algorithms is in line with the risk management obligations under the DSA.

22 December 2022

European Commission call for feedback on regulation for supervisory fees under the EU DSA

The European Commission launched a call for feedback on the delegated regulation to specify the criteria to be used when calculating the supervisory fees provided for in Article 43 of the DSA.

The regulation is intended to supplement the DSA with the detailed methodologies and procedures regarding the supervisory fees charged by the Commission on providers of VLOPs and VLOSEs. The request for feedback closed on 19January2023.

17 February 2023

Obligation to publish information on average monthly active recipients

All “online platforms” and “online search engines” required to publish information on their average monthly active recipients by 17 February 2023. Guidance on identification and counting of active recipients was published on 1 February 2023.

17 February 2023

The European Commission published a draft of its implementing decision

The DSA gives the Commission the power to create laws called “implementing acts”, which implement specific parts of the regulation. The draft decision covers the EU executive’s investigatory and enforcement powers, platforms’ right of reply to enforcement actions and their right to access commission files in disputes. The Commission is receiving feedback until midnight on 16 March 2023.

Why is this important?
 
The introduction of the DMA and DSA is indicative of the growing trend towards increased regulation of major online platforms. The implementation of these legislative initiatives will result in significant changes to online platforms, including increased costs, stricter regulatory scrutiny, and more extensive obligations. A failure to comply with the DMA and DSA can result in substantial penalties, amounting to 10% and 6% of the company’s total worldwide annual turnover respectively. In cases of repeated infringements, these fines can be raised to up to 20%.
 
Any practical tips?
 
As the implementation phase of both the DMA and DSA is now underway, digital platforms and service providers operating in the EU are strongly advised to continue with their DSA and DMA compliance efforts and ensure that they have a comprehensive understanding of the stages involved leading up to the deadlines to avoid potential penalties.
 
 
Spring 2023

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