Regulating ‘big tech’: Council agrees on enhancing competition in the digital sphere

(Source: Council of the EU and European Council)

The Council agreed its position (‘general approach’) on the proposal for a Digital Markets Act (DMA). The proposal aims to ensure a competitive and fair digital sector with a view to promoting innovation, high-quality digital products and services, fair prices, and high quality and choice in the digital sector.

“Today we reached an important milestone in the creation of a more open and a more competitive digital market. The Slovenian presidency has been working hard with member states and the European Commission to find a good compromise and to further improve the DMA’s goals: ensuring a fair and competitive digital market. We are proud that member states unanimously supported the general approach. This shows that the EU is strongly committed to ensure fair competition online. The proposed DMA shows our willingness and ambition to regulate big tech and will hopefully set a trend worldwide”. – Zdravko Počivalšek, Slovenian Minister for Economic Development and Technology

Online platforms offering core platform services – such as search engines, social networking services and intermediation services – are playing an increasingly important role in our social and economic life. However, a few large online platforms are seen as ‘gatekeepers’ between businesses and consumers, creating bottlenecks in the economy through their market power and control over digital ecosystems. This negatively affects fair competition.

With this proposal, ministers aim to create a level playing field in the digital sector, with clear rights and obligations for large online platforms. The regulation of the digital market at EU level will ensure a level playing field and a competitive and fair digital sector, so that companies and consumers can all benefit from digital opportunities.

The DMA proposal is targeted at gatekeepers who control ‘core platform services’, which are platforms where the identified problems are most prominent. Core platform services include: online intermediation services (i.e. marketplaces, app stores), online search engines, social networking, cloud services, advertising services, and more.

The main changes to the Commission proposal are the following:

  • the Council’s text shortens the deadlines and improves the criteria for the designation of gatekeepers
  • the text includes an annex that defines ‘active end users’ and ‘active business users’
  • improvements were made to make the structure and the scope of obligations clearer and more future-proof
  • the text proposes a new obligation that enhances the right of end users to unsubscribe from core platform services
  • provisions on regulatory dialogue were improved to ensure that the discretionary power of the European Commission to engage in this dialogue is used appropriately
  • to prevent fragmentation of the internal market, the text confirms the European Commission as the sole enforcer of the regulation. Member states can empower national competition authorities to start investigations into possible infringements and transmit their findings to the European Commission

Background

To tackle emerging digital challenges such as the spread of counterfeit goods, hate speech, cyber threats, disinformation, limited competition and the foreclosure of digital markets, the European Commission tabled a digital services package in December 2020. It presented a legislative proposal on the Digital Services Act (DSA) and a Digital Markets Act (DMA).

On 27 May 2021, at the Competitiveness Council, ministers held an exchange of views providing guidance for the continuation of the negotiations.

Next steps

The general approach reached today completes the negotiating position agreed by the Council and provides the Council Presidency with a mandate for further discussions with the European Parliament, which are scheduled for 2022.

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