On Tuesday December 15th, 2020, the European Commission published two draft regulations, one concerning digital services (known as the “Digital Services Act”) and the other digital markets (known as the “Digital Markets Act”).
These two draft regulations, which are expected to enter into force by 2022, aim to propose a comprehensive set of new rules that will apply to all digital services, including social networks, online marketplaces and any type of online platform active in the European Union (hereafter “EU”).
These regulations are the centrepieces of the European digital strategy, and will impact all numerical organisations and activities.
The DMA aims to create a legal framework to regulate online platforms which have such economic and political powers that they actas« gatekeepers » of online markets, a term defined with reference to several cumulative criteria:
- Having a strong economic position and significant impact on the EU internal market, while being active in multiple EU countries;
- Having a strong intermediation position, meaning linking a large user base to a large number of businesses;
- Occupying that position in a perennial way (being stable over time).
The GAFA(M) are therefore most directly concerned.
The EU aims to notably (i) ensure a more stable and fair commercial environment to the businesses which are dependent on gatekeepers to propose their services online, especially innovators and start-ups, which should not be subject to abusive terms and conditions which limit their growth; (ii) grant freedom of choice to consumers, regarding the online services they chose, (iii) forbid gatekeepers from using unfair practices in order to obtain an undue advantage over businesses and consumers.
Those prescriptions appear of the essence, while the global pandemic has shed light on the growing need for online markets.
Several obligations are thus imposed on gatekeepers which will notably be bound (according to article 5 of the DMA’s draft):
- To allow their business users to promote their offer and conclude contracts with their customers outside of the gatekeeper’s own platform;
- To allow their business users to access the data that they generate in their use of the gatekeeper’s own platform;
- To allow third parties to inter-operate with the gatekeeper’s own services in certain specific situations;
- Not to prevent users from un-installing any pre-installed software or app if they wish so;
- Not to treat services and products they offer more favourably in ranking than similar services or products offered by third parties on the gatekeeper’s platform;
- Not to prevent consumers from linking up to businesses outside their platforms.
Any violation of these obligations will be met with (i) a fine of up to 10% of the gatekeeper’s total worldwide annual turnover, and (ii) periodic penalty payments of up to 5% of the average daily turnover.
The relevant platforms should therefore comply as soon as possible with these new prescriptions.
Our Law firm and its Team of IT law specialists will be happy to assist you regarding the implementation of these new prescriptions and any legal issue you may face in that regard.
By Marie-Alix André, Eva Baliner-Poggi and the IP/IT Team
This post is also available in: French