1055 - Strengthening the Digital Markets Act and Its Enforcement

Strengthening the Digital Markets Act and Its Enforcement

Over the last decades, the digital transformation has profoundly changed the functioning of the global economy. Due to the
Covid-19 crisis the importance and use of digital products and services has further increased. While digital products and services
have brought many benefits to European consumers and businesses, in many constellations only a few, very large providers control
the access to digital markets. Therefore, the undersigning Friends of an effective DMA welcome the Commission’s Proposal for a
Regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act)
and fully support its goal to ensure a fair and contestable Single Market for digital services where companies and innovation can
thrive and where users have genuine choices and control. Though to ensure that this goal can be achieved, the DMA should be
re-enforced in a number of areas as well as put together in a broader perspective with modernised competition policy instruments.

1. The scope of the DMA should be targeted and take the role of ecosystems into account more explicitly:
The DMA is intended to provide a targeted set of harmonised mandatory rules, which are meant to apply to a small number of large
providers of core platform services which typically have the ability to leverage their advantages from one area of their activity to
new ones. While we welcome the combination of quantitative thresholds with qualitative criteria through a market investigation,
the proposed list of criteria does not cover the issue of whether a platform offers an ecosystem of services. We propose to add such
criterion which corresponds to an admittedly important driver of limited contestability and unfairness in digital markets.
The current definition of gatekeeper might cover a range of more than 10 undertakings which differ in terms of business models
and regarding the number and variety of the (core platform) services they offer. Too wide a scope could be questionable in terms
of proportionality and impact negatively the enforceability of the DMA. It might therefore be worth considering prioritizing
enforcement, for instance by further narrowing down the scope of the DMA.

2. The relation of the DMA to European competition law must be further specified:
Aside from safeguarding fairness for users of gatekeeper platforms, the DMA is aimed at preserving markets‘ contestability.
This implies the Regulation applies adjacent to competition law. We have doubts about whether the Commission’s proposal fully
addresses all the issues raised by this. It is of utmost importance that the new instrument actually complements existing tools
(i.e. European and national competition law), rather than weakening or substituting them. As the DMA and competition law are
to pursue complementary and proximate goals, both sets of rules must not hamper but indeed complete one another,
throughout synergy effects This requires a sound coordination of both the content and the enforcement of the rules.

3. The DMA must leave sufficient leeway for national rules applicable to gatekeepers:
National and European legislation should be complementary for addressing issues of market foreclosure and unfairness entailed
by the behaviour of digital gatekeepers. These legislations should not undermine each other either. Since the digital economy is
complex and multifaceted, a number of constellations may bear national peculiarities. Member States should therefore remain
able to set and enforce national rules including national competition law applicable to gatekeepers‘ unilateral conduct.
The framework should grant such national provisions and the enforcement thereof a sufficient and clear leeway, as granted,
for example, by the provisions of Article 3 of Council Regulation (EC) No 1/2003 of 16 December 2002.

4. DMA should offer more flexibility and tailor-made remediation to cope with the reality of digital markets:
Digital markets are highly dynamic and innovative. The DMA must therefore be designed in a way to keep up with changing
environments and new developments in technology and market behaviour. We welcome that Article 10 will allow the
Commission to update obligations for gatekeepers. Although this mechanism yet provides some degree of flexibility to adapt
the regulation over time, we are concerned that the current proposal could not suffice to tackle the fast-moving patterns of
gatekeepers’ behaviour. We would suggest a further step, based on broader and complementary principles or objectives,
towards a fully-fledged tailor-made intervention befitting the heterogeneity of business models and the dynamic nature of
these markets. This approach should complement Articles 5 and 6, which should remain directly applicable.

5. The role of Member States must be strengthened, especially with regard to the possibility to update the DMA:
To ensure that the DMA keeps up with the fast pace of digital markets, the DMA already includes a market investigation tool to
update its rules. We welcome this future-proofness-oriented mechanism. However, this framework should provide for a swift
and proactive cooperation between Member States and the Commission. Procedurally, this means one Member State should
not only be entitled to request a market investigation under Article 15 of the DMA. This should also be possible under Articles 16
and 17 of the DMA. Since these articles allow to overhaul the substantial provisions of the Regulation, the role of the Member
States is to be clarified and strengthened to ensure their proper contribution to the law-making process.