DMA

Digital Markets Act (DMA): Legal Classification and Comprehensive Analysis

Der Digital Markets Act (DMA) is a key regulation of the European Union for the regulation of digital markets. The aim of this legislative act is to ensure fair competition conditions in the digital sector, especially with respect to so-called gatekeepers, i.e., very large online platforms. By introducing new behavioral rules and sanction mechanisms, the act aims to limit the market power of a few companies and guarantee access for smaller market participants. The following provides a detailed explanation of the essential legal aspects, definitions, obligations, as well as the procedure and enforcement of the DMA.

Background and Purpose of the DMA

The Digital Markets Act was proposed by the European Commission in December 2020 and entered into force on November 1, 2022. Its objective is to combat structural problems and anti-competitive practices in the area of digital services through European legal provisions. The DMA supplements existing legal norms in competition law and expands the toolkit of internal market law through specific rules for digital markets.

Definition: Gatekeeper

The term Gatekeeper is at the core of the DMA. It refers to companies that, due to their size, number of users, and significance in the digital ecosystem, exert significant influence over access to markets and innovation processes. Gatekeepers are subject to special statutory obligations since they crucially determine the competitive conditions.

Objectives of the Regulation

• Establishing fair competition conditions
• Promoting innovation and choices
• Preventing the abuse of market power
• Improving access for smaller companies and consumer rights

Scope of Application and Affected Services

Material Scope

The DMA targets digital services that are considered so-called core platform services These include in particular:

• Online intermediation services (e.g., marketplaces)
• Search engines
• Social networks
• Cloud services
• Operating systems
• Advertising networks
• Video-sharing platforms
• Browsers and voice assistants

Personal Scope

The rules apply to companies that cumulatively exceed various thresholds, such as revenue, market capitalization, and user numbers. The designation as gatekeeper is made by a decision of the European Commission but may also be confirmed or refuted subsequently in the context of a review procedure.

Obligations and Prohibitions for Gatekeepers under the DMA

The DMA contains a detailed set of obligations for gatekeepers. The most important contents can be systematized as follows:

Positive obligations (active commitments)

• Interoperability: Gatekeepers must ensure that their services are technically interoperable with third-party services.
• Data access: Third parties are given access to data generated by gatekeepers under certain conditions.
• Portability of user data: End users can more easily transfer personal data when switching providers.

Negative obligations (prohibitions of acts)

• Self-preferencing: Gatekeepers are not allowed to favor their own services in rankings.
• Usage restrictions: It is prohibited to prevent users from uninstalling pre-installed software.
• Restriction of parity clauses: Gatekeepers may not prescribe exclusive conditions to business partners for their own channel.

Transparency obligations

Gatekeepers must provide comprehensive information about their business model, algorithmic decision-making, and advertising practices, and must disclose this information.

Enforcement and Sanctions

Responsibilities

The implementation and supervision of the DMA is primarily the responsibility of the European Commission. National authorities support within their own competencies, in particular for sector-specific matters.

Procedure

• Notification and review procedure: Companies that meet the gatekeeper criteria must notify the European Commission. The Commission decides on the classification and publishes a corresponding list.
• Investigation procedure: If violations are suspected, the Commission may initiate investigations, including requests for information, on-site inspections, and consultations with affected parties.

Sanctions and remedial measures

In the event of infringements, the Commission may impose fines of up to 10% of the global annual turnover and, in case of repeated offenses, up to 20%. In addition, structural measures—such as the obligation to divest parts of the business—are provided for as a last resort.

Relationship with Other Areas of Law

Competition law

The DMA stands in a complex relationship with traditional European competition law (Art. 101, 102 TFEU and Regulation (EC) No. 1/2003). The regulation covers specific market situations in which traditional competition law tools have been considered too slow. The application of the DMA rules occurs independently, without the need to demonstrate an abuse or dominant position under competition law.

Data protection and consumer protection law

The DMA correlates with the General Data Protection Regulation (GDPR) and further consumer protection laws, especially since some of the access and interoperability obligations raise data protection questions. However, the DMA neither establishes legal bases nor introduces additional data protection obligations, but instead refers to existing legal frameworks.

Outlook and Assessment

The Digital Markets Act marks a paradigm shift in the regulation of digital markets. By explicitly assigning obligations to gatekeeper companies and establishing a supranational enforcement mechanism, the act seeks to sustainably strengthen market balance in the digital sector. The practical implementation and the interactions with existing legal frameworks will crucially shape the extent to which the DMA’s objectives are achieved in the coming years.

Literature and Legal Sources

• Legal Basis: Regulation (EU) 2022/1925 of 14 September 2022 (DMA)
• Official Publications: EUR-Lex
• Further Literature: Articles and commentaries in academic journals on competition and digital law

Further Terms

• Digital services
• Gatekeeper
• European competition law
• Platform regulation
• Network economy

The Digital Markets Act is a significant step toward modern regulation tailored to the challenges of digital business models and, in its legal complexity, serves as a key reference point for the development of digital internal markets in the European Union.

Frequently Asked Questions

What obligations arise from the DMA for so-called gatekeeper companies?

For gatekeeper companies within the meaning of the Digital Markets Act (DMA), numerous specific obligations arise to ensure fair competition in digital markets and curb excessive market power. For example, gatekeepers must prevent their own services from being favored over those of third-party providers (self-preferencing prohibition). They are required to inform business users about relevant data flows and allow them access to generated user data. Furthermore, gatekeepers may not prohibit end users and business users from concluding contracts outside their platforms. Additionally, they must ensure the interoperability of certain core services and take measures to maintain the portability of personal data. These obligations are supplemented by extensive transparency requirements, including the disclosure of advertising data and the basis of algorithmic decisions to relevant business customers and the European Commission.

How is a company designated as a gatekeeper according to the DMA?

The determination of whether a company qualifies as a gatekeeper is based on objective and quantitative criteria established in the DMA. These include, among others, EU turnover figures (at least 7.5 billion euros annually in the last three fiscal years or a market capitalization of at least 75 billion euros in the last fiscal year) as well as the number of monthly active users in the EU (at least 45 million end users and 10,000 business users monthly). The European Commission checks the fulfillment of these thresholds as well as qualitative factors such as control over core platform services or existing network effects. In special circumstances, the Commission may also designate a company as a gatekeeper independently of thresholds. After designation, the company remains obligated to implement comprehensive compliance measures and to regularly demonstrate these to the Commission.

What sanction mechanisms does the DMA provide for in the event of violations?

If a gatekeeper breaches the obligations set out in the DMA, the European Commission may impose severe sanctions. Fines can reach up to 10% of the company’s worldwide total turnover; in case of repeat infringements, up to 20% is possible. Additionally, in cases of severe or repeated violations, the Commission may require market-structural remedies, which can include functional or structural changes to the business model. Penalty payments are also provided for in cases where companies fail to comply with Commission orders. The sanction mechanisms are intentionally strict to ensure effective enforcement and deterrence against dominant market players.

How can affected companies challenge decisions of the European Commission under the DMA?

Companies affected by a gatekeeper designation or sanctions under the DMA have the right to appeal these decisions. The competent body is the General Court of the European Union (GC), which examines the legality of the Commission’s decision in an annulment action. The company can file a lawsuit in due form and time and has the opportunity to present evidence and make detailed arguments against the decision. The judgment of the GC can in turn be appealed to the European Court of Justice (ECJ). Thus, the DMA provides comprehensive legal protection mechanisms for affected companies.

How does the DMA interact with existing competition law provisions, particularly Articles 101 and 102 TFEU?

The DMA supplements the existing competition law toolkit in the EU, in particular the prohibitions of abusive behavior under Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). In contrast to these ex-post provisions, which allow competition authorities to act against specific misconduct, the DMA sets out ex-ante clear obligations for gatekeepers to prevent certain dominant market practices. The applicability of the DMA does not affect the parallel powers of intervention provided by competition law. National supervisory authorities and the European Commission coordinate their activities to ensure consistent application of the law.

To what extent are third-party providers and business users legally protected by the DMA?

Business users and third parties benefit significantly from the statutory requirements of the DMA. They gain improved access to essential interfaces, data, and service environments of gatekeepers. The DMA thus strengthens the legal position of business customers, enabling them, for instance, to use direct complaint mechanisms at the Commission and claim specific disclosure and interoperability measures. Furthermore, gatekeepers are obliged to provide non-discriminatory conditions and transparency regarding contractual frameworks and pricing structures. This creates comprehensive legal protection mechanisms for business users and third-party providers to ensure fair competition conditions.

What reporting and documentation obligations exist under the DMA?

Gatekeepers are required to submit regular, comprehensive reports and compliance statements to the European Commission. These include, among others, transparency reports on advertising practices, algorithmic systems, data access, and compliance with specific DMA obligations. When implementing new functions, gatekeepers must also submit detailed descriptions to the Commission in advance and set out potential impacts on competition and end users. There is also a notification obligation for intended mergers and acquisitions. The documentation obligations serve effective administrative supervision and are intended to enable continuous review of gatekeeper-specific measures.