A Guide To Digital Markets Act: For Website Owners

Do you know about the Digital Markets Act law or DMA that works primarily in the European Union (EU)?  

The Digital Markets Act is a regulation passed by the European Union in May 2023 to make the digital economy safe and secure for small businesses.

The need to enforce DMA came because of the unregulated digital space in the European Union. DMA laws also aim to protect users’ digital privacy.

This article will focus on the what is Digital Markets Act, when it came into force, the requirements, and who it applies to.

So, keep reading to learn more about DMA.

What is the EU Digital Markets Act 2022?

The European Union established the Digital Markets Act to improve market competition and position of the small business owners in the digital sector. The EU Digital Markets Act was enacted on November 1, 2022, and came into force on May 2, 2023.

The DMA revolves around six major tech companies known as gatekeepers. These tech companies significantly influence domestic markets, serve as a vital bridge by which companies can connect with customers, and have a solid and stable market position.

The six gatekeepers are Alphabet (the parent company of Google), Amazon, Apple, ByteDance(the parent company of TikTok), Meta (the parent company of Facebook), and Microsoft (the parent company of LinkedIn).

The Digital Markets Act has a set of objectives for selecting gatekeepers. Objectives include providing core platform services like search engines, app stores, and messenger services. The Gatekeepers will have to follow specific requirements and restrictions.

The main objective of the Digital Markets Act 2022 is to ensure fair competition by preventing big tech companies from controlling the market and allowing new competitors to enter.

Who Does DMA Apply To?

DMA applies to organizations and platforms that significantly impact the digital economy. For example, platforms that

• Has an extensive market reach, strong purchasing power, and a multi-year lifespan.
• Serve as an essential link for companies and potential clients.
• It has a strong position that is difficult to overcome.

A business operating in the European Union or European Economic Area has two months to notify the European Commission if it satisfies all of these three requirements. The business will then have to go through the formal gatekeeper designation procedure.

To Qualify As a DMA Gatekeeper, Companies Must:

• Have a market value of at least €75 billion from their most recent fiscal year or have had at least €7.5 billion in annual revenue within the European Economic Area (EEA) for three consecutive years before being eligible to become DMA gatekeepers.
• Have more than 45 million end users and more than 10,000 active business users annually.
• Have fulfilled the second prerequisite regularly for a minimum of three fiscal years.

The European Union named six significant digital firms in September 2022 as the Digital Markets Act (DMA) gatekeepers. Under the DMA, these businesses have six months to complete compliance for all their essential digital services.

To stop misuse of the gatekeeper role, the DMA imposes limitations on its primary platform services, which include social media, cloud computing, search engines, and OS systems.

Before the European Commission can apply any fines, companies identified as gatekeepers have six months to comply with their gatekeeper criteria.

What are DMA Requirements?

The EU Digital Markets Act mandates specific activities from gatekeepers to promote fair competition. For example, gatekeepers need to:

• Allow third-party access to use the gatekeeper’s services in specific scenarios.
• Enable business users to access the data generated by their platform usage.
• Provide publishers and advertisers with the tools to verify the ads hosted on their platforms independently.
• Allow business users to advertise deals and finalize agreements outside of the gatekeeper’s system.

Furthermore, gatekeepers are not allowed to use specific unfair strategies. For example, gatekeepers are not allowed to:

• Prioritize the gatekeeper’s services over comparable third-party services on their platform.
• Block consumers from accessing businesses outside their platforms.
• Prevent users from uninstalling pre-installed software or apps if desired.
• Track end users outside the core platform for targeted advertising without consent
• Combining personal data from different services owned by the same company (e.g., Facebook and WhatsApp).

Not complying with the above-mentioned requirements can lead to severe penalties.

Digital Markets Act Timeline

According to the DMA schedule, gatekeepers have six months to comply with new standards after their designation date, March 6, 2024.

July 2022 —> DMA text was approved by the European Parliament and Council

October 12, 2022 —> DMA law was published

November 1, 2022 —>Digital Markets Act came into effect

May 2023 —–> Most of the DMA rules became applicable

September 6, 2023 —-> Digital Markets Act European Commission designated the six gatekeeper companies

March 6, 2024 —-> Gatekeepers have six months to comply with the new obligations

2025—-> European Commission to update DMA based on market reports 

May 3, 2026—-> European Commission to assess DMA and propose amendments

Fines and Penalties Under the Digital Markets Act 2022

The Digital Markets Act (DMA) clarifies the consequences when its regulations are violated. 

Articles 29-30 of the DMA state that for a first offense, a company can be penalized up to 10% of its worldwide sales, and for subsequent offenses that occur within eight years, a penalty of up to 20% can be imposed.

Additionally, gatekeepers may face recurring fines of up to 5% of their average daily turnover.

Suppose gatekeepers fail to meet their obligations, such as providing inaccurate information and data access. In that case, they may be fined up to 1% of their total income from the previous fiscal year.

What Does the DMA Mean For Your Business?

Although small websites and applications won’t immediately be affected by DMA regulations, the Digital Markets Act aims to promote fairness and innovation in the digital realm.

Before collecting or processing personal data through gatekeeper platforms or services, the user’s consent must be obtained, and the gatekeeper must be informed.

Website owners are required to record that EU users have consented to process their personal data.

You can use a Consent management platform (CMP) like WP Cookie Consent to obtain consent for using cookies and access to personal data.

This plugin can help you enable consent logging and ensure that you comply with EU laws and regulations.

You can also get user consent on one WordPress site and apply it to other sites in the network if you manage several WordPress sites for the same organization.

Checklist For DMA Compliance

The Digital Markets Act (DMA) is transforming the digital landscape by focusing on large web platforms known as “gatekeepers” that have a broad reach throughout the European Economic Area.

To help you make sure your website complies with DMA requirements, let’s have a look at the DMA checklist:

• Use efficient technology to manage privacy and obtain consent from users.
• Take care when handling user information and keep privacy policies up-to-date and precise. 
• Always ask for the customer’s consent before collecting or using their personal information. 
• Provide signals of consent to gatekeeper services like Google Consent Mode. 
• Allow business users to access their data as per the DMA guidelines.
• Ensure that gatekeeper services and platforms comply with the law and stay updated about any changes or additions to gatekeeper guidelines.

FAQ

Conclusion 

The Digital Markets Act is a European policy, but it will have an impact on businesses all over the world.

It could inspire other nations to enact similar legislation. This rule will alter how big tech corporations operate online, impacting several online platforms.

It is advised to employ a DMA-supporting cookie management platform, such as WP Cookie Consent, to adhere to the cookies set by the gatekeeper service platform.

If you enjoyed reading this post, you should also read our other interesting articles:

• Understanding Cookie Consent Manager for GDPR Compliance
• Best Cookie Consent Plugin: WP Cookie Consent Vs Complianz Review
• Do I Need A Privacy Policy On My Website? – Guide To Create One

Do you want to comply with DMA law? Grab the WP Cookie Consent plugin now.