Privacy & Information Security Law Blog

On December 15, 2021, the European Parliament adopted its position on the proposal for a Digital Markets Act (“DMA”), ahead of negotiations with the Council of the European Union.

The DMA introduces new rules for certain core platforms services acting as “gatekeepers,” (including search engines, social networks, online advertising services, cloud computing, video-sharing services, messaging services, operating systems and online intermediation services) in the digital sector and aims to prevent them from imposing unfair conditions on businesses and consumers and to ensure the openness of important digital services.

The text of the DMA was approved by Parliament with 642 votes in favor, 8 against and 46 abstentions. Members of the European Parliament (“MEPs”) made certain key amendments to the text, including:

• Web browsers, virtual assistants and connected TV were added under the definition of “gatekeepers” and therefore, within the scope of applicability of the DMA;
• The quantitative threshold for a company to be subject to the DMA was raised to €8 billion in annual turnover in the European Economic Area (“EEA”) and a market capitalization of €80 billion. In addition, to be subject to the DMA, companies must provide a core platform service in at least three EU countries and have at least 45 million monthly end users, as well as more than 10,000 business users;
• The latest text of the DMA includes additional requirements regarding the use of data for targeted or micro-targeted advertising and the interoperability of services. In particular the text of the DMA provides that a gatekeeper shall “for its own commercial purposes, and the placement of third-party advertising in its own services, refrain from combining personal data for the purpose of delivering targeted or micro-targeted advertising,” except where there is a “clear, explicit, renewed, informed consent.” In addition, the text stresses that personal data of minors must not be processed for commercial purposes, such as direct marketing, profiling and behavioral advertising;
• The text introduces restrictions, by the European Commission, on acquisitions in areas relevant to the DMA in case of systematic non-compliance. In addition, gatekeepers would also be required to inform the European Commission of any intended concentration;
• Infringement of the DMA could result in fines of not less than 4% and not exceeding 20% of a company’s total worldwide turnover in the preceding financial year;
• MEPs also proposed the creation of a “European High-Level Group of Digital Regulators” to facilitate cooperation and coordination between the European Commission and EU Member States.

Next Steps

The approved text will be Parliament’s mandate for negotiations with EU governments, which should start at the beginning of 2022 (under the French presidency of the Council).

Read the text approved by Parliament.

The press release is available on the European Parliament’s website.