The Digital Markets Act, a European antitrust revolution?

"Apple has made more changes in 10 days thanks to the DMA than in ten years of antitrust policy." T.B.

The Digital Markets Act (DMA) came into effect on March 7, 2024.

Explicitly designed to rebalance competition in the digital sector, it sets out prohibitions and preventive obligations for six “Gatekeepers” (or access controllers): Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft.

Review of the Union’s new antitrust arsenal.

The Key Principles of the DMA.

The DMA should be understood as an initial regulatory act, extremely precise, and endowed with a genuine enforcement mechanism.

It should be considered an initial act for several reasons:

  • Firstly, the European Commission will organize “DMA compliance workshops” with various digital actors to ensure the implementation of the initial measures (concerning 22 digital services) and assess the effects of these measures on the gatekeepers’ competitors.
  • Secondly, the Commission will launch sanction procedures in case of infringements of these measures.
  • Thirdly, the Commission may recalibrate existing measures and extend them to new online services (and other companies that would become gatekeepers).

It is not necessary, in this post, to go into detail about the measures enacted. In broad terms, they aim to (i) enable data portability and system interoperability, (ii) prohibit gatekeepers from favoring their own services or products, and (iii) prohibit the abusive exploitation of personal data.

Regarding enforcement, the Commission has the power to impose fines of up to 20% of the gatekeeper’s global turnover for infringements, or even, as a last resort, to dismantle the offenders.

 

Initial impacts and first infringements.

“Apple has made more changes in 10 days thanks to the DMA than in ten years of antitrust policy.”

Despite the figurative nature of Thierry Breton’s statement, gatekeepers have indeed made significant compliance efforts: delisting Google Maps and Google Flight services from the eponymous search engine, announcing interoperability between Meta’s messaging platforms and third-party messengers, deploying iOS version 17.4 opening up the operating system to third-party applications, and so on.

However, infringement procedures have already been launched by the Commission despite these modifications being deemed insufficient.

Apple, Alphabet, and Meta are respectively targeted for:

  • App Store rules, especially restrictions preventing application developers from freely communicating with users of their iPhones and iPads;
  • Google Play and Google Search’s consumer steering rules, favoring the group’s services (it was indeed fined €2.4 billion in 2017 solely for its Google Shopping service);
  • Meta’s “payment or consent” model and its applicability to combined data (obtained from various company services) used for advertising profiling.

Moreover, preliminary investigations are ongoing regarding (i) Amazon’s search practices and (ii) Apple’s new fee structure for alternative app stores.

The conclusion of these investigations is expected before Mrs. Vestager’s mandate expires in November.

 

Repairing the damages of victims of abusive dominance.

Many DMA measures combat cases of abusive dominance that have been known for many years (Apple towards developers, Alphabet towards other application services, etc.).

The new scales of sanctions opened by the DMA—especially the possibility of dismantlement—will increase pressure on gatekeepers and facilitate both court-awarded damages and opportunities to settle cases of abusive dominance.

This is particularly significant as the DMA comes into force amid a particularly busy antitrust news cycle, marked since the beginning of the month by:

  • The entry into force of the Digital Services Act (DSA) concurrently with the DMA (the DSA mainly deals with data use issues but some have direct competition impacts; notably the question of training generative AIs);
  • The Commission’s fine of Apple of $1.8 billion for anticompetitive practices in the music streaming industry;
  • Alphabet’s fine of $250 million by the French competition authority for not respecting its commitments to press publishers;
  • The US Department of Justice’s lawsuit against Apple for violating the Shearman Act, etc.

In a nutshell:

The enforcement of the DMA marks a renewal in the European Union’s antitrust policy.

The various investigations, which will continue until the end of the year, will exert constant pressure on gatekeepers. These entities will be all the more eager to avoid opening too many legal cases with European companies, which would only bolster the Commission’s position.

Therefore, it is a real window of opportunity for victims of abusive dominance seeking redress.

Our Disputes department specializes in these matters, which we often handle within the framework of IGEJ – our association aimed at enabling French companies of all sizes to seek redress against multinational corporations (including GAFAM).

Feel free to contact arnaud.cluzel@outmatch.fr for any further information.

 

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