The European Parliament’s Committee on the Internal Market and Consumer Protection has voted in favor of the Digital Markets Act that aims to limit the power of large tech companies with a gatekeeper position. The European Parliament will vote on the law in December.
The proposal focuses on large companies that offer ‘core platform services’, such as social networks, search engines, operating systems, streaming services and advertising services, the European Parliament writes. These are considered ‘gatekeepers’ under the law if, for example, they have at least 45 million active users in the EU, are active in at least three European countries and if they have an annual turnover of eight billion euros within the EU.
These companies have the potential to be so large that they can easily push smaller parties out of the market. This allows the gatekeepers to continue to grow while not necessarily offering better services to consumers, the committee said. In practice, they can also devise the rules that other providers must comply with. According to parliament, this is an undesirable situation that it wants to counter with the Digital Markets Act, or DMA.
Under the adopted proposal, companies will not be allowed to impose ‘unfair terms’ on companies and consumers who want to use their services. They may also not use the data they collect for targeted or micro-targeted advertising unless clear, explicit and informed consent has been given, as applies under the GDPR.
The DMA also gives the European Commission more options to tackle gatekeepers who go wrong. The Internal Market Committee talks about limiting takeovers in order to prevent damage within the European market. MEPs also propose that a ‘European High-Level Group of Digital Supervisors’ be established in which the European Commission and Member States can better consult on how to tackle gatekeepers. The parliamentarians also want whistleblowers under the DMA better protected if they want to tell stories about gatekeeper companies.
If a gatekeeper company does not comply with the DMA rules, the European Commission can impose a fine of four to twenty percent of a company’s worldwide turnover. The EC looks at the turnover in the previous financial year. The proposal has now been approved by part of the European Parliament, with the entire European Parliament allowed to vote in December. If the law is approved, parliament will discuss its implementation with member states early next year.