The European Commission announced last night that the Digital Markets Law (DMA) and the Digital Services Law (DSA) have been approved, marking a new chapter in how technology companies will be able to operate in the EU. The parliament voted 588 in favor and 11 against for the DMA, while 539 deputies supported the DSA, with 54 votes against.
What is in the DMA and DSA regulations?
The DMA allows for a variety of antitrust actions while addressing interoperability issues. These include the right to uninstall software on devices, tighter personal data access controls, greater advertising transparency, an end to providers who prefer their own services, and the lifting of some restrictive app store requirements for developers.
Meanwhile, the DSA is setting new rules for how Internet companies must protect European users from online disinformation and illegal content, goods and services. The law prohibits the practice of targeting users online based on their religion, gender, or sexual preference, so-called dark patterns to mislead users, and deceptive web design to encourage people to unintentionally click on online content. line.
Both regulations are expected to go into effect early next year, once the formal adoption process is complete.
According to the Commission, the sanctions will be progressive but unprecedented in scope. For companies that violate the DSA, the fines will amount to up to 6% of worldwide turnover. However, in the case of serious and repeated infringements, the legislation will allow national courts to prohibit companies from operating on European territory. Under the DMA, penalties will be set at 10% of total billing, or up to 20% for repeat offenders.
A new era for regulation
Pinar Akman, a law professor specializing in competition law and director of the Jean Monnet Center of Excellence in Digital Governance at the University of Leeds, said the adoption of the DMA and DSA is the start of a new era for digital regulation. markets, in particular with the DMA, which is interested in the contestability and fairness of digital markets.
However, he cautioned that much of what the legislation can achieve will depend on how it can be implemented and enforced in practice.
"There are a lot of issues with the DMA text and we may see some litigation over it, which may mean we're not seeing the rapid changes we want in digital markets," Akman said.
In a recent article, he highlighted a number of uncertainties regarding the substantive provisions of the WFD, noting that although the rules are intended to be self-executing, many obligations under Article 5 cannot actually be self-executing given their contents.
“As far as technology companies are concerned, the big platforms will already be making significant efforts to bring their operations into compliance with the DMA and DSA to the extent that they can do so without further guidance from the Commission, as the rules will be applicable. automatically as soon as they come into force.
Copyright © 2022 IDG Communications, Inc.