The EU Digital Markets Act

A companion to the Digital Services Act, the Digital Market Act (DMA) was adopted last month and is due to come into force in 2023. The main objective of this regulation is to regulate the behaviour of the Big Tech firms within the European Single Market and beyond. The EU Commission aims to guarantee a fair level of competition (“level playing field”) in the highly concentrated digital European markets, which are often considered to create a “winner takes all” configuration.

The DMA covers 8 different sectors which are known as Core Platforms Services (CPS). These CPS are of concern from a competition point of view due to the presence of “gatekeepers” which affect the market contestability. The CPS considered problematic by the European Commission are: online search engines (e.g., Google Search); online intermediation services (e.g., Google Play. Apple App Store); social networks (e.g., Facebook, Tik Tok); video-sharing platforms (e.g., YouTube); communication platforms (e.g., WhatsApp, Twitter); advertising services; operating systems (e.g.  Google Android); cloud services (e.g. AWS).

Readers will recall that the SA Competition Commission’s Market Inquiry into the large ecommerce platforms, which is still ongoing, used arguments from the (then draft) DMA as a basis for arguing the need for the inquiry, and promised that Big Tech would be dealt with in SA once the EU and other major competition authorities had paved the way. The text of the DMA can be found here – https://eur-lex.europa.eu/legal-content/en/ALL/?uri=COM:2020:842:FIN

Meanwhile in the USA, the Federal Trade Commission (FTC) plans to use its rulemaking authority to emulate Europe’s precautionary approach to antitrust pivoting from “ex-post” enforcement actions based on tangible harms to “ex-ante” prohibitions on a wide range of business practices, but the American Innovation and Choice Online Act (AICOA) was voted out of the Senate Judiciary Committee in January. That law would have, among other aspects, ignored Amazon’s interest in preserving the vitality of its third-party seller ecosystem (exactly the function of Takealot which the SA Competition Commission is focusing on). This interconnection between SA’s policies and those of the EU and USA deserves more consideration.