Gatekeepers, “Killer” Acquisitions, Advertising … A First Step Toward DMA Adoption

The Committee on the Internal Market and Consumer Protection (IMCO) approved this morning, by 42 votes in favor, 2 against and 1 abstention, its position on the Digital Markets Law (DMA). This proposal for a regulation was presented by the European Commission in December 2020 and aims to regulate large technology companies in order to restore a certain balance in the internal market.

“We do not want large companies to grow more and more without improving and at the expense of consumers and the European economy as a whole,” said Andreas Schwab, rapporteur for the text. The president of the parliamentary committee, Anna Cavazzini, added that with this new legislation “the European Union ends the absolute dominance of the market in the EU by the large online platforms.”

MEPs expand reach
As a reminder, the future regulation will apply to large companies that offer “essential platform services”, such as online intermediation services, social networks, search engines, operating systems, online advertising services, online services, computing in the cloud and video sharing services. Contrary to the Commission’s initial proposal, MEPs have included web browsers, virtual assistants and connected televisions in the field of text.

To qualify as a “gatekeeper” (translated as “gatekeeper” by Brussels), these large companies must meet certain conditions. MEPs also modified the text of the European executive on the fixed threshold. Thus, to enter the scope of the WFD, a company must have an annual turnover of 8,000 million euros in the European Economic Area (EEA), compared to the previous 6,500 million euros. In addition, its market capitalization must be 80,000 million euros, compared to 65,000 million euros according to the Commission’s text.

At least 45 million end uses per month
To qualify as a gatekeeper, companies will also need to provide an essential platform service in at least three EU countries and have at least 45 million end users per month, as well as more than 10,000 companies. MEPs proposed an annex containing details on how these indicators should be measured.

Regarding targeted advertising, MEPs indicated that access controllers “ for their own commercial purposes and third-party advertising placement on their own services, [devront] refrain from combining personal data in order to offer targeted or micro-targeted advertising. ” On the other hand, they may carry out this practice as long as Internet users have given their “informed, explicit and renewed” consent in accordance with the General Data Protection Regulation (RGPD). In addition, the personal data of minors should not be treated for commercial purposes. Therefore, direct marketing, profiling, and targeted behavioral advertising will be prohibited for this category of Internet users.

Expanded powers of the Commission
MEPs also want the acquisitions of these large companies to be better supervised to combat abuses of dominance. Therefore, the European Commission may restrict so-called “killer” acquisitions by gatekeepers in areas included in the DMA. They will also be obliged to inform the Commission of “any proposed market concentration”, specify MEPs in the text.

More generally, if a gatekeeper does not comply with the rules, the Commission can impose fines representing 4% and not exceeding 20% ​​of the world turnover during the previous financial year, we can read in the proposal.

Before being final, this text has yet to be voted on during a plenary session in Parliament scheduled for December 2021. Negotiations with the governments of the member states will begin during the French presidency of the EU Council in January 2022. The other proposal to regulate online platforms, the Digital Services Law (DSA), which deals in particular with illegal content and algorithms, will be voted on in committee shortly.

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