What’s next for the DMA?

On 12 of October 2021 the ALDE Party hosted in collaboration with Microsoft our first hybrid Stakeholder Series event for this autumn season, “What's next for the DMA?”.

What is a Stakeholder series event?

Stakeholder Series Events are a new type of ALDE party event series where we bring together prominent European stakeholders from the public and private sector to discuss key EU policy topics through open and inclusive panel discussions with our MEPs and political leaders.

Highlights of the discussion

Panellists discussed issues related to the predicted final text of the European Commission’s Digital Markets Act (‘DMA’) proposal, which was launched at the end of 2020.

Speakers included MEP Ondřej Kovařík, Senior Attorney from Microsoft Carel Maske, General Counsel from Kelkoo Group Steve Thomas and Baroness Sal Brinton as moderator.

MEP Ondřej Kovařík highlighted that “There is a will of MEPs to clarify or bring more details into the proposal in some areas mainly regarding the scope of the DMA, what kind of services should be covered by the regulation and in terms of setting the obligations and requirements from those companies defined as so called gatekeepers of the market.”

Carel Maske from Microsoft added that the DMA “should be about gatekeepers and not about everything digital. There is some political momentum in being ambitious but there is a cost to it being overly broad… It cannot be one rule fits all and forever.”

Steve Thomas from Kelkoo gave his perspective regarding the scope of the DMA. “The scope of the DMA and the resources needed in order to effectively enforce it, as the potential scope expands and other issues become part of what the DMA is trying to solve, it becomes difficult to effectively enforce the provisions. How much can we actually do, and what are the biggest problems we are trying to solve?”

Problems of legislation and enforcement

As Steve Thomas appropriately highlighted, there are potential problems surrounding the speed of enforcement, as not much use will come with regulations that are too difficult to comply with and which cause a prolonged period, possibly years, for organisations to come up to speed with the DMA. This led to Baroness Sal Brinton to question MEP Kovařík on this regard, whom pointed out that if there are too many requirements, there is the risk that the regulation itself would become impossible to enforce. The DMA would require the Commission to set up a potential dedicated Unit and in this case the question arises on what kind of expertise would the future staff need?

Carel Maske from Microsoft points out that we must focus the problem. The objective should be to find the solution with strong collaboration from experts, in order to have something which addresses the concerns that both businesses and users have when interacting with large platforms.

Monopolisation of big companies

The discussion was further stirred by the discussion surrounding the outage which took place on October 4, 2021, where the social network Facebook and its subsidiaries were unavailable for a period of 6 hours.

Steve Thomas commented on the outage by remarking that this “highlights the issues that we have, so many people suddenly had no other options left. If we have no alternatives available how can things function?”

Carel Maske from Microsoft added, “We cannot end up in a world where we just have one provider. The DMA should create room and opportunities, increase competitiveness and change the market into an environment where there is room for alternatives” He further elaborated by pointing out that how you interfere with the market becomes critical. If you apply the same the rules you apply to gatekeepers such as Google to other platforms such as Bing, you might negatively affect competitiveness in that market. There needs to be control on how the DMA plans to interfere into the market.

Q&A: What kind of criteria and how can gatekeepers be designated in the DMA?

A question from the audience was launched to the panel “we have both quantitative criteria that we see also in the DMA but also qualitative criteria such as competitiveness in the market – since we are probably not going towards a razor-sharp criterion in terms of the companies the DMA is addressing, do you see the need for qualitative in top of quantitative criteria in order to address the scope of the DMA?

MEP Kovařík told the audience that issues pertaining to quantitative threshold discussions have been going on in the European Parliament. He further added “I agree with the way the Commission decided to design the quantitative criteria - they are fine and well balanced. We do need a more detailed definition of how active end users and the business users are defined”

Carel Maske from Microsoft responded that we need “Qualitative criteria which focuses around the gatekeeping function and what makes a service a gatekeeper  “Look at Bing, we meet the qualitative criteria but Bing is not a gatekeeper – we need to correct the outcomes which are the results of a fixed threshold and you can also do that in the context of obligations, which leads to the regulatory dialogue which currently might be too broad.”  He pointed out that we cannot cover everyone with obligations which are unnecessary, and which don’t improve contestability and fairness, ultimately risking deterring markets rather than re-introducing competition.

Steve Thomas from Kelkoo Group also added his opinion “the issue here is making sure that the DMA applies to gatekeepers – this means not only focusing on an organisation and its power but rather on the influence of a particular service.”

The overall conclusion of the discussion which al panellists agreed upon was that there was a clear need for the DMA to ultimately level the playing field.

Missed the event? Watch it in full here.

Interested in partnering with us on a future stakeholder series event and in being featured in our next Liberal Insider Pro issue? Email Laura at [email protected]

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