What Makes the UE’s Digital Markets Act Unique

In “The EU’s Proposal for a Digital Markets Act – An Ex Ante Landmark,” Prabhat Agarwal of the European Commission explains the features that make the Digital Markets Act a unique regulatory instrument, compared to any other piece of legislation approved before.

The European Parliament approved the DMA in December 2021 and it could enter into force in early 2023 after the 27 member states ratifies the text. The DMA essentially blacklists certain practices used by large platforms acting as “gatekeepers.” This bill includes most of the conducts that the European Union has considered anticompetitive in the past after investigating Google, Amazon, Apple and Meta. The law also foresees the possibility of breaking up a company, but this is unlikely — before proposing such a drastic measure, the regulator would have to find violations of the law in three different investigations in a very short timeframe.  

Prabhat argues that the DMA is more than a list of prohibitions, and he based his opinion in three characteristics that reflect the uniqueness of this law:  

The first is the DMA’s structure and operation. While the existing regulatory framework effectively deals with several issues in the platform economy environment, the DMA takes a step further than other legal tools in covering issues and services that business users and consumers encounter in digital markets when engaging specifically with the online platforms that hold gatekeeper power. It does so by going beyond general fairness principles or identified problematic behavior by a subset of online platforms that enjoy gatekeeper power and tackles up-front negative impact(s) that could arise from specific behavior by such market operators, in particular when combined with unique features of digital markets.  

The second is the DMA’s design versus other regulatory regimes.  The DMA does not only aim to address identified forms of “problematic” behavior, but also some of the most important structural issues prevalent in digital markets. In particular, the DMA tackles some of the inherent barriers to entry in the digital markets, which due to confluence of several (already known) economic features tend to favor the emergence of winner-takes-all ecosystems and thereby result in highly concentrated digital markets. This phenomenon, in turn, has allowed digital platforms to become gatekeepers in relation to the core platform services that they offer, leading to a lock-in of business users and end-users in the short term and to a reduction of contestability of digital markets in the long term.  

The third is that the DMA goes beyond precedents and is dynamic. The DMA covers practices that have not been yet the subject of antitrust investigations in the EU or any of its Member States. For example, the obligation that the DMA imposes on online search engines, which grants competitors access to ranking, query, click and view data on fair, reasonable and non-discriminatory terms (Article 6(1) (j)). This places the burden on the companies, which will have to comply with these requirements six months after they are qualified as gatekeepers, without the possibility to argue procompetitive effects of these conducts. 

The DMA is forward-looking and future-proof in that obligations can be updated if harmful conduct evolves. Such updates will be possible via delegated acts. It is not required that the new type of behavior has previously been dealt with in any way by competition agencies, so a preceding antitrust decision would by no means be required before adjusting the list of practices. The future-proofing mechanism is an important feature of the DMA; without it, the DMA would simply reflect the lawmakers’ knowledge at the time of adoption. A static instrument, however, would not be appropriate given the highly dynamic and fast-evolving nature of digital markets.  

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