After a committee of MEPs approved proposed rule amendments, the European Union is one step closer to imposing new controls on digital goliaths.
The Digital Markets Act (DMA) establishes the limitations that ‘gatekeepers,’ such as social media corporations and search engines, can impose on other businesses and customers.
The DMA, which was written by the European Commission in December 2020, was delayed for a long time as MEPs from the Committee on the Internal Market and Consumer Protection (IMCO) examined its wording.
The DMA overcame another obstacle shortly after the IMCO issued its judgment when EU ministers unanimously endorsed the Council’s general approach to the Act.
The resolution gives the Council presidency authority to continue negotiations with the European Parliament next year on the DMA.
The DMA was intended by the European Commission to regulate so-called ‘core platform services,’ such as online intermediation services, social networks, search engines, operating systems, online advertising services, cloud computing, and video-sharing services, which were the most vulnerable to unfair practices.
The IMCO expanded the definition of “core platform services” during the committee stage to include web browsers, virtual assistants, and connected television.
MEPs on the IMCO also raised the quantitative limits for a corporation to be covered by the DMA from €8 billion in yearly turnover in the European Economic Area (EEA) to €80 billion in market capitalization.
Companies must also provide a core platform service in at least three EU countries and have at least 45 million monthly end users, as well as more than 10,000 corporate users, to qualify as a gatekeeper.
These restrictions, on the other hand, would not prevent the Commission from designating other businesses as gatekeepers if they met specific criteria.
Gatekeepers will be prohibited from putting unreasonable requirements on businesses and customers under the DMA.
MEPs added new rules to the legislation concerning the use of data for targeted or micro-targeted advertising.
MEPs also proposed forming a “European High-Level Group of Digital Regulators” a cooperation between the Commission and EU member states tasked with enforcing the DMA.
The IMCO enhanced the maximum sanctions that gatekeepers could incur for refusing to comply with the DMA to 20% of their total yearly global revenue.
The DMA will now be presented to MEPs for ratification during the plenary session of the European Parliament in December.
The text will then become the mandate of parliament for discussions with EU states, which are set to begin in early 2022 during the French presidency of the Council.
The EU Council has also announced its negotiating position on the Digital Services Act (DSA), a companion proposal to the DMA that aims to govern illegal internet material and algorithms.
At a later meeting, the IMCO will vote on DSA amendments.