Digital Markets Act — In with regulation, out with regulation

The draft Digi­tal Mar­kets Act (DMA) is inten­ded to enable sec­tor-spe­ci­fic mar­ket regu­la­ti­on of so-cal­led gate­kee­pers. Gate­kee­pers are com­pa­nies that ope­ra­te cen­tral plat­form ser­vices and ther­eby exceed the legal­ly defi­ned thres­holds. Spe­ci­fic con­duct obli­ga­ti­ons are posi­tively impo­sed on the­se companies.

Howe­ver, the strict stan­dard of Art. 5 and 6 DMA does not app­ly uncon­di­tio­nal­ly. This is becau­se the com­pa­nies con­cer­ned also have pos­si­bi­li­ties to avo­id regu­la­ti­on irre­spec­ti­ve of the thres­holds exceeded.

Which paths lead to regulation?

The lis­ting of cer­tain com­pa­nies is based on mate­ri­al cri­te­ria. The­se are lin­ked to the stan­dard plat­form struc­tu­re and posi­ti­ve thresholds.

Per­spec­ti­ve: Cru­cial is the model of what are often refer­red to as mul­ti-sided mar­kets. Here, dif­fe­rent user groups with their dif­fe­rent inte­rests are inter­me­dia­ted by a platform.

For­mu­la: If a plat­form is aimed at a par­ti­cu­lar­ly lar­ge num­ber of users and the eco­no­mic power of the ope­ra­ting com­pa­ny is also par­ti­cu­lar­ly high, the DMA assu­mes a need for regu­la­ti­on. This approach avo­ids the sub­stan­ti­ve hurd­les of the anti­trust mar­ket power investigation.

Pro­ce­du­re: The desi­gna­ti­on of a com­pa­ny as gate­kee­per is car­ri­ed out by the EU Com­mis­si­on accor­ding to Art. 3 para. 4 DMA. The com­pa­ny has the oppor­tu­ni­ty to sub­stan­tia­te that it does not ful­fil the mate­ri­al gate­kee­per cri­te­ria of Art. 3 para. 1 DMA. If the sub­mis­si­on is sub­stan­tia­ted, the EU Com­mis­si­on must car­ry out a mar­ket inves­ti­ga­ti­on in accordance with Artic­le 3 para. 6 DMA in con­junc­tion with Artic­le 15 DMA. In this case, the EU Com­mis­si­on bears a hig­her bur­den of jus­ti­fi­ca­ti­on in order to be able to desi­gna­te the com­pa­ny as a gatekeeper.

Self-assess­ment obli­ga­ti­on: Inde­pendent­ly of this, the gate­kee­pers are sub­ject to an acti­ve obli­ga­ti­on to inves­ti­ga­te and report whe­ther they exceed the thres­holds pur­su­ant to Art. 3 para. 3 DMA. Fail­ure to com­ply with this obli­ga­ti­on can be punis­hed with a fine of up to 1% of the world­wi­de tur­no­ver of the pre­vious year accor­ding to Art. 26 para. 2 lit. a DMA. The gene­ral anti­trust cri­te­ria for the assess­ment of fines app­ly here.

How to get out of regulation?

Sta­tus moni­to­ring: The gate­kee­per posi­ti­on must be review­ed every two years. This means that the mate­ri­al cri­te­ria of the need for regu­la­ti­on must be review­ed on a regu­lar basis ex offi­cio. Not­wi­th­stan­ding this, the com­pa­ny can eit­her pro­ceed accor­ding to Art. 3 (4) sub­pa­ra. 2 DMA and initia­te its reli­ef in the con­text of a mar­ket inves­ti­ga­ti­on or pre­sent facts accor­ding to which the mate­ri­al cir­cum­s­tances of its gate­kee­per desi­gna­ti­on no lon­ger apply.

Sta­tus reduc­tion: An appli­ca­ti­on for sus­pen­si­on under Artic­le 8 DMA is not aimed at the gate­kee­per posi­ti­on, but at the scope of obli­ga­ti­ons under Artic­les 5 and 6 DMA. Accor­ding to this, the EU Com­mis­si­on can sus­pend indi­vi­du­al spe­ci­fic duties of con­duct. To do so, the gate­kee­per must pro­ve excep­tio­nal cir­cum­s­tances accor­ding to which the pro­fi­ta­bi­li­ty of its busi­ness acti­vi­ty is end­an­ge­red by spe­ci­fic duties of con­duct. The sus­pen­si­on request is review­ed every year. Accor­ding to Art. 8 para. 3 DMA, inte­rim mea­su­res by the EU Com­mis­si­on are also possible.

Sta­tus “chan­ge” to anti­trust law: If the sus­pen­si­on request is gran­ted by the EU Com­mis­si­on, this does not release the com­pa­ny from the gene­ral anti­trust obli­ga­ti­ons. This gains signi­fi­can­ce whe­re the sus­pen­ded duty of con­duct was deri­ved from an anti­trust harm theo­ry. In this case, the sus­pen­si­on decis­i­on its­elf has no effect on the pro­hi­bi­ti­on effect. Howe­ver, it could be obvious that the com­pa­ny could also bring for­ward jus­ti­fy­ing cir­cum­s­tances with regard to the mar­ket power abu­se pro­hi­bi­ti­on if it was alre­a­dy suc­cessful with the sus­pen­si­on request. It will still be inte­res­t­ing to see whe­ther and to what ext­ent the EU Com­mis­si­on binds its­elf with a sus­pen­si­on decision.

Sta­tus exemp­ti­on: An appli­ca­ti­on for exemp­ti­on under Art. 9 DMA is not aimed at com­pa­ny-rela­ted inte­rests, but at public inte­rests. This can also refer to an enti­re plat­form ser­vice. The grounds of public inte­rest are enu­me­ra­ted in para­graph 2: public mora­li­ty, public health, public safe­ty. Unli­ke in gene­ral anti­trust law, inte­rests that go bey­ond the pro­tec­ti­ve pur­po­se of com­pe­ti­ti­on and ser­ve poli­ti­cal pur­po­ses can also be taken into account. The­r­e­fo­re, it would not have to be exami­ned first whe­ther mora­li­ty, health or safe­ty is the object of effec­ti­ve com­pe­ti­ti­on in the con­cre­te case con­stel­la­ti­on and thus no rest­ric­tion of com­pe­ti­ti­on comes into consideration.

Obligation to notify concentrations

The effects of the­se pos­si­bi­li­ties on the sec­tor-spe­ci­fic noti­fi­ca­ti­on obli­ga­ti­on pro­po­sed in Art. 12 DMA are not enti­re­ly clear. Accor­ding to this, all mer­gers invol­ving ano­ther ope­ra­tor of cen­tral plat­form ser­vices or pro­vi­der of other ser­vices in the digi­tal sec­tor are to be noti­fied by a gatekeeper.

Despi­te suspension/​exemption? The wor­ding “gate­kee­per” indi­ca­tes that in any case appli­ca­ti­ons for sus­pen­si­on or exemp­ti­on (of the gate­kee­per sta­tus) have no influence on the per­so­nal posi­ti­on. This is becau­se this sta­tus is not affec­ted by the decis­i­ons on the applications.

Despi­te excul­pa­to­ry fac­tu­al sub­mis­si­ons? Not­hing else appli­es with regard to the pos­si­bi­li­ty of a sub­stan­tia­ted sub­mis­si­on on the non-exis­tence of the requi­re­ments for gate­kee­per sta­tus. This results from the fact that the obli­ga­ti­on under Art. 3 para. 3 DMA for self-assess­ment appli­es uncon­di­tio­nal­ly. Only upon a cor­re­spon­ding decla­ra­to­ry decis­i­on by the EU Com­mis­si­on will a com­pa­ny be released from regulation.

Scope: This sec­tor-spe­ci­fic obli­ga­ti­on to noti­fy goes very far. In addi­ti­on to the ope­ra­tors of cen­tral plat­form ser­vices, which as such are alre­a­dy cover­ed by the DMA, it also covers the pro­vi­ders of other ser­vices in the digi­tal sec­tor. Accor­ding to the defi­ni­ti­on in Art. 2 No. 4 DMA, the digi­tal sec­tor refers to pro­ducts and ser­vices pro­vi­ded through infor­ma­ti­on socie­ty services.

About the author

Porträtbild von Dr. Sebastian Louven

Dr. Sebastian Louven

I have been an independent lawyer since 2016 and advise mainly on antitrust law and telecommunications law. Since 2022 I am a specialist lawyer for international business law.

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