Closed Gates - open questions on the designation of gatekeepers

Closed Gates - open questions on the designation of gatekeepers

The final text of the DMA still leaves questions on the designation of gatekeepers

The European Commission (EC), Parliament and Council have now agreed on the final text of the EU’s ex-ante regulatory tool for enhancing digital competition, the Digital Markets Act (DMA). The DMA will take a novel approach towards deciding which firms should be subject to regulation. In a significant departure from the concept of dominance under competition law (and the concept of Significant Market Power in the telecoms sector), the DMA will largely determine which firms should be subject to regulation (called gatekeepers) based on a range of quantitative thresholds.

The final DMA text has made some amendments to the rebuttal process (such as the type of evidence that can be presented) for any firm which wants to argue that they are not a gatekeeper for a particular core platform service (CPS) despite meeting the DMA’s quantitative thresholds. In most cases, firms that meet these thresholds seem to have a limited ability to rebut the gatekeeper presumption due to the DMA’s strong wording. However, there may be room for debate in some cases where firms are clearly behind the market leader(s). These ‘edge cases’ could be a key area where the DMA will be tested when it is first implemented.

Aside from the rebuttal procedure, other changes to the gatekeeper designation process in the final DMA text include the ability for firms to split their CPSs into distinct services, under certain circumstances, when determining whether their user numbers meet the quantitative thresholds. The final DMA text also includes an annex setting out how the number of users should be measured for different CPSs. Further, the DMA has also expanded the list of obligations for the lighter “emerging gatekeeper” category: firms designated as gatekeepers that don’t yet satisfy the criterion of having an “entrenched and durable position”, but may do so in the near future. Also, the DMA now allows for the removal of CPSs and gatekeeper obligations (rather than just their addition).

Even now that the DMA text has been finalised, there is still some uncertainty as to which companies and services will be designated as gatekeepers. The quantitative criteria eventually adopted suggest that beyond the usual Big Techs such as Apple and Google, companies such as travel site could potentially also be named as gatekeepers. Moreover, the Big Techs could be designated as gatekeepers for some CPSs where they are not particularly strong, given that it is possible for a firm to be a gatekeeper under the DMA even if it is not the market leader.

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