The European Commission announced late yesterday that the Digital Markets Act (DMA) and Digital Services Act (DSA) have been voted through, marking a new chapter for how technology companies will be able to operate in the EU. The parliament voted 588 in favor and 11 against for the DMA, while 539 MEPs backed the DSA, with 54 votes against.
What is in the DMA and DSA regulations?
The DMA enables a range of antitrust action while also addressing issues of interoperability. These include the right to uninstall software on devices, greater personal data access controls, enhanced advertising transparency, an end to vendors self-preferencing their own services, and stopping certain restrictive app store requirements for developers.
Meanwhile the DSA sets out new rules for how internet companies should keep European users safe from online disinformation and illegal content, goods and services. The practice of targeting users online based on their religion, gender or sexual preferences, so-called dark patterns to trick users, and deceptive web design aimed at encouraging people to unwillingly click on online content will all be banned under the legislation.
Both regulations are expected to start applying early next year after the formal adoption process is completed.
According to the Commission, sanctions will be gradual but unprecedented in their scope. For companies found violating the DSA, fines will amount to up to 6% of global turnover. However, in the event of serious and repeated breaches, the legislation will allow national courts to ban companies from operating on European territory. Under the DMA, sanctions will be set at 10% of global turnover, or up to 20% for repeat offenders.
A new era for regulation
Pinar Akman, a law professor specializing in competition law and the director of the Jean Monnet Centre of Excellence on Digital Governance at the University of Leeds, said the adoption of the DMA and the DSA is the beginning of a new era for the regulation of digital markets, particularly with the DMA, which focuses on the contestability and fairness of digital markets.
However, she cautioned that much of what the legislation can achieve will depend on how it can be implemented and enforced in practice.
“There are many issues with the text of the DMA, and it is possible that we will see litigation on these, which may mean that we don’t see the desired speedy changes in digital markets,” Akman said.
In a recent paper she highlighted a number of uncertainties in relation to the substantive provisions of the DMA, noting that although the rules are supposedly self-executing, many of the obligations under Article 5 cannot really be self-executing given their contents.
“As for the tech companies, the large platforms will already be spending considerable effort in order to bring their operations in line with the DMA and the DSA to the extent that they are able to do so without further guidance from the Commission as the rules will be automatically applicable when they enter into force.”
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