MEPs on the European Parliament’s Committee on the Internal Market and Consumer Protection adopted (42 votes in favour, 2 against, 1 abstention) the text by Andreas Schwab (EPP, Germany) on the Digital Markets Act (DMA) (see EUROPE 12837/2) on Tuesday 23 November on the sidelines of the plenary session.
“Competition rules alone cannot solve all the problems we face with the technology giants and their ability to set the rules through unfair business practices. The DMA will exclude these practices, sending a strong signal to all consumers and businesses in the single market: the rules are set by co-legislators, not by private companies!”, said Mr Schwab.
The text adopted in the parliamentary committee aims to put an end to the practices of ‘gatekeepers’, which are considered “unfair”. In concrete terms, MEPs went back on several aspects of the European Commission’s proposal.
In addition to data intermediation services, social networks, online advertising services, and search engines, MEPs also included web browsers, virtual assistants, and connected TV in the scope of the DMA.
“We have also extended the definition of payment services to clearly include ApplePay and GooglePay”, commented the Renew Europe group.
In terms of a definition, the European Commission’s quantitative thresholds have been revised. To qualify as a ‘gatekeeper’, companies must provide a service in at least three Member States, have at least 45 million monthly end-users and more than 10,000 business users.
In order to fall within the scope of the DMA, these large companies will also have to report an annual turnover of at least €8 billion within the European Economic Area (EEA) and have a market capitalisation of at least €80 billion.
However, the text specifies that these thresholds cannot prevent the European Commission from designating other companies as ‘gatekeepers’ if they meet certain conditions.
“We are sending a clear signal to GAFA: it is time for more equality in the digital markets! Large platforms, some of which have become more powerful than some states, have long taken advantage of legal loopholes“, said Geoffroy Didier (EPP, France).
S&D and Greens/EFA heard on targeted advertising
The text adopted in IMCO on Tuesday also aims to regulate advertising practices. With regard to targeted advertising, ‘gatekeepers’ will have to refrain - except in the case of “clear, explicit, renewed and informed” consent - from combining users’ personal data for the purpose of delivering targeted advertising.
Several amendments tabled by the S&D and Greens/EFA groups along these lines were adopted on Monday 22 November.
The two political families in Parliament also addressed the ban on processing the personal data of minors for commercial purposes.
“For us, the S&D group, people’s interests come first, and that is why I am very satisfied with the compromise we have reached on one of the most important issues for our group: targeted advertising”, said the rapporteur for the DSA, Evelyne Gebhardt (S&D, Germany).
Avoiding concentrations
In addition, the text also addresses the issue of the concentration of companies under the control of web giants. To solve this problem, MEPs propose, among other things, that ‘gatekeepers’ should be obliged to inform the European Commission of any current or future acquisition plans.
The European Commission could also prohibit certain acquisitions in order to protect the internal market.
MEPs on Parliament’s IMCO committee also supported the creation of a ‘European High Level Group of Digital Regulators’ to facilitate cooperation between Member States and the European Commission. The latter will remain the guarantor of the proper application of the rules. National competition authorities will have the ability to launch investigations into potential violations of the DMA and refer them to the European Commission.
“National competition authorities, which have developed real expertise, have a clear role in supporting the European Commission’s enforcement work. Regulating 10 to 15 companies the size of Google, Facebook and Amazon will require more [resources] than 80 companies”, the Renew Europe group said in a statement.
Finally, in terms of sanctions, the text provides that the European Commission may impose fines on offending ‘gatekeepers’. A minimum threshold of 4% of annual worldwide turnover and “not exceeding 20%” of annual worldwide turnover has been set.
MEPs will be asked to vote on the text at the next plenary session of the European Parliament in December. “We want to reach a quick agreement on the DMA. If we manage to negotiate with the French Presidency, I think it is realistic to imagine an entry into force in 2023”, concluded the rapporteur, Andreas Schwab. (Original version in French by Thomas Mangin)