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The Digital Markets Act

Learn about the Digital Markets Act (DMA), which ensures fair competition among digital services in the EU. Discover compliance strategies for organizations and gatekeepers.

The Digital Markets Act (DMA) aims to ensure an open market for gatekeepers,  companies, and end users for important digital services. Gatekeepers are large digital platforms providing so called core platform services, such as online search engines, app stores or messenger services for example. The DMA became applicable on 2 May, 2023.

Currently, there are over 10,000 digital services companies operating in the European Union and 90% are either small or midsize enterprises. Before the DMA entered into force, each of the 27 Member States had unique regulations. The financial burden of compliance restricted the ability of many of these organisations to operate effectively. Common rules across the single market have been designed to foster innovation, growth, and competitiveness.

The requirements include prohibitions on combining data from different services owned by the same company, such as Meta's Facebook and WhatsApp, as well as protections for platforms' business users, including advertisers and publishers. There are legal measures against self-preferencing practices, which prevent platforms from promoting their own products over competitors, exemplified by Google Search favouring Google services. Additionally, regulations address the pre-installation of certain services, such as those on Android devices, and impose restrictions on bundling practices. The requirements also ensure interoperability and portability, allowing businesses and end-users access to their data, while mandating that users have the ability to remove any pre-installed software.

Small and midsize enterprises are exempted from the most costly obligations of the act and there is a year-long exemption from these obligations, after they have scaled up past the thresholds that qualify them as a “small company”.

The DMA offers mechanisms to increase the bargaining power of smaller players and correct gatekeeping organisations who do not comply with the rules. In the event of infringements of the act, the European Commission can impose fines of up to 10% of a company’s total worldwide annual turnover — and up to 20% in the case of repeated breaches — and periodic penalties of up to 5% of a company's average total daily turnover.

How should organisations respond to the Digital Markets Act?

Organisations will need to assess the impact of the DMA on their business and business model, identifying where changes are needed and where further attention needs to be paid to current processes.

Trusted advisers can help organisations understand how the DMA can be applied within their existing framework by:

  1. Assessing how “gatekeepers’” existing operations comply with the DMA requirements and identifying areas where they may fall short of the regulations.
  2. Developing tailored compliance strategies for each organisation. This may involve outlining specific steps they need to take to align with the DMA, such as restructuring their digital ecosystem, updating data practices, or implementing new transparency measures.
  3. Updating the latest guidelines, interpretations, and enforcement practices related to the act. Guiding organisations through compliance requirements, clarifying any ambiguities, and offering practical advice.
  4. Conducting training sessions for their employees to raise awareness about the DMA and its impact on their roles. Educating them on compliance measures, data protection practices, and the ethical use of customer data.
  5. Ensuring they remain compliant with the DMA over time. Regularly assessing the organisation’s progress, identifying any gaps or emerging issues, and providing recommendations for continuous improvement.

A comprehensive plan that covers all the new and upcoming legislation covered by the EU’s digital strategy can create opportunities as well as mitigate risk.

To learn more contact a Marsh representative.

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