The Digital Markets Act (DMA) is the European Commission's flagship legislation to level the online playing field. Competition law has been regulated at an EU level for many years, with Member States also having their own national regulators. What will the DMA mean for the relationship between EU and Member State competition law and what will national regulators be required to do as a result?
As the DMA progressed through the legislative process, national competition authorities called for powers to be able to enforce it in their own right, with the Commission retaining primary responsibility. In addition, they demanded a system providing close coordination between the agencies involved. They also called for a right to ask the Commission to conduct market investigations or inspections of gatekeepers or designated gatekeepers, with France, Germany and the Netherlands lobbying for an even stronger enforcement role for Member States.
The primary rationale for this was that national competition authorities already had expertise in addressing competition issues in the digital economy which needed to be leveraged to achieve the fundamental objectives of the DMA. Moreover, the absence of such coordination would, as expressed by the national regulators in a Joint Paper in June 2021, create unnecessary risks. These included inefficiencies and significant delays due the European Commission's insufficient resources and the possibility of conflicting decisions due to inconsistent application of EU and national competition law.
Despite national competition authorities’ call for enforcement rights of their own, the Commission will remain the sole enforcer of the DMA. In the end, the legislators agreed that this was the best way to monitor the cross-border activities of gatekeepers properly and to guarantee an unfragmented internal market as well as to provide legal certainty. The DMA confines the role of the national competition authorities primarily to carrying out ancillary activities:
In order to avoid fragmentation of the internal market, under Article 1(5) of the DMA, EU Member States may not impose further obligations on gatekeepers by law, regulation or administrative measures in order to ensure contestable and fair markets.
In contrast, Article 1(6) states that the provisions of the DMA do not, in principle, supersede EU and national competition law. Articles 101, 102 TFEU and sections 1, 19 and 20 of Germany's Act against Restraints of Competition (ARC) therefore remain applicable which means the DMA does not restrict the powers of national competition authorities in the application and enforcement of EU and national competition law.
However, an exception is provided under Article 1(6) when it comes to national competition law prohibitions of gatekeepers’ unilateral conduct, which impose additional obligations on gatekeepers, i.e. obligations that already exist under the DMA.
In light of this exception, there is a question as to whether national laws regulating the market behavior of gatekeepers are in conflict with the DMA. This could be relevant for several jurisdictions, including Germany, Austria, Greece and Italy, which have recently introduced or are considering introducing such provisions.
For example, the German national legislature introduced the provision in section 19a ARC in 2021, giving the German Competition Authority (Bundeskartellamt) the right to restrict the market behavior of undertakings with an overriding cross-market importance for competition. The Bundeskartellamt has already initiated proceedings against Amazon, Alphabet, Apple and Meta on the basis of section 19a ARC. In view of the supremacy of the DMA, however, it is highly questionable whether this provision (or other comparable national provisions) will have any practical significance or be superseded by the DMA's conduct obligations for gatekeepers.
Stephan Manuel Nagel and Alexander Schmalenberger look at the main elements of the DMA.
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Bram Nijhof looks at the designation of digital gatekeepers under the DMA.
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Paolo Palmigiano looks at the UK's answer to the EU's Digital Markets Act.
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Debbie Heywood looks at the EC's plans to tackle the data dominance of the tech giants under the incoming Digital Markets Act.
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The UK government has proposed one of the most significant reforms of UK competition law in recent years. Paolo Palmigiano looks at the key issues.
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