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Digital technologies and in particular the internet is transforming our world and recently the European Commission passed the Digital Markets Act (DMA) to make the “digital sector fairer and more competitive”. DMA establishes a set of criteria for qualifying a large online platform so-called gatekeeper” i.e., operators of search engines, social networks, and chat apps. These rules will establish obligations for gatekeepers, “do’s” and “don’ts” they must comply with, in their daily operations.
Benefits:
- Business users who depend on gatekeepers to offer their services will have a fairer business environment.
- Innovators and technology start-ups will have new opportunities to compete and innovate in the online platform without having to comply with unfair terms and conditions which limit their development.
- Consumers will have more and better services to choose from, more opportunities to switch their provider if they wish so, direct access to services and fairer prices.
- Gatekeepers will keep all opportunities to innovate and offer new services. They will simply not be allowed to use unfair practices towards the business users and customers to gain an undue advantage.
- It blacklists certain practices of large platforms and enables the Commission to carry out market investigations and sanction non-compliant behaviours.
Concerns:
- Some provisions of the DMA will create unnecessary privacy and security vulnerabilities for users while others will prohibit from charging for intellectual property in various deals.
- Forcing messaging apps such as WhatsApp to be interoperable will affect encryption, or suppress iterative product design.
- It may create harmful economic side effects due to unfair competition from industries.
- The DMA’s qualitative and quantitative thresholds may potentially hurt the growth of new businesses and deter EU digitalization. The thresholds could also impact innovation in some circumstances.
Today, it is clear that competition rules alone cannot address all the problems we are facing with tech giants and their ability to set the rules by engaging in unfair business practices. The Digital Markets Act will rule out these practices, sending a strong signal to all consumers and businesses. These rules should boost innovation, growth and competitiveness and will help smaller companies and start-ups compete with very large players.
