On 23 November 2021, the EU Parliament’s Committee on the Internal Market and Consumer Protection voted on the proposal on the Digital Markets Act. The negotiated compromise amendments were adopted by a large majority. This agreement is an important first step towards implementing this urgently needed legal act. However, from the Austrian Chamber of Labour’s point of view further improvements of this Directive proposal are required.
The proposal for a Digital Markets Act shall make certain that big online platforms – so-called gatekeepers – are being subjected to stricter regulation. It is the declared goal to ensure that tech-companies do not abuse their market power in the digital sector, thereby guaranteeing fair competition in the single market. Following intensive negotiations on the Commission’s proposal, a large majority of MEPs (42 votes in favour, 2 against and 1 abstention) in the Committee on the Internal Market and Consumer Protection adopted the compromise text on 23 November 2021.
Which platforms are affected?
Gatekeepers are big online platforms, which provide key platform services – such as social media, search engines, intermediation services and video-sharing services – thereby having a high level of market power. The Directive provides for thresholds, which have to be cumulatively reached for a tech-company to be defined as a gatekeeper. From the Austrian Chamber of Labour’s point of view, however, exceeding a single threshold should be enough to identify a company as a gatekeeper. On a critical note it also has to be pointed out that Parliament has even increased the thresholds proposed by the Commission. Hereby, the turnover threshold has been increased from 6.5 to 8 billion Euro and the market capitalisation threshold from 65 to 80 billion Euro. Hence, it cannot be ruled out that the definition will be watered down and that relevant companies will not be included in the Directive’s area of application.
However, the EU Parliament provides for improvements concerning sanctions: sanctions shall already be imposed in the case of two non-compliances within ten years, whilst the Commission had proposed three non-compliances within five years. Apart from that, the potential extent of sanctions has been increased from maximal 10 % to 20 % of the company’s last annual turnover. Finally, from the AK’s point of view it is key to the success of the legal act that the classification as gatekeeper can be dealt with swiftly. Here, Parliament has provided for a reduction of time limits.
Ban on targeted advertising for minors
The ban on targeted advertising also represents an important demand of the Austrian Chamber of Labour is an has been intensively debated by the EU Parliament. MEPs agreed in the compromise text that targeted advertising for adults should only be permitted under explicit consent. Processing data of minors for advertising purposes shall be prohibited. However, in the Austrian Chamber of Labour’s opinion, this must under no circumstances result in platforms ascertaining users’ age by tracking.
Improvements in case of interoperability, “killer acquisitions” and protecting whistleblowers
The compromise text also includes improvement concerning interoperability in case of messenger services and social networks. The aim of interoperability requirements is to ensure that digital services of different platforms are compatible. To guarantee fair competition in digital markets, MEPs also made additions to inhibit so-called “killer acquisitions”. This concerns corporate takeovers with the aim of eliminate potential future competition in the market. Apart from that, gatekeepers will have to inform the Commission of mergers outside the digital sector. Finally, Parliament added provisions to the Commission proposal, which are to guarantee the protection of whistleblowers.
The Council will probably adopt a general approach on 25 and 26 November 2021. The vote on the legal act in the Parliament’s plenary session is scheduled for 13 December 2021, followed by the trilogue negotiations between Parliament, Council and Commission. If these negotiations are swiftly concluded, the Digital Markets Act could come into force in 2023. From the Austrian Chamber of Labour’s point of view, the target should be to improve the legal act within the framework of further negotiations. It is to be welcomed that the Digital Markets Act has been included in the Representative Actions Directive; however, an active part of employees and consumers within the scope of enforcement at EU level must be provided for. The opportunity to subject online platforms to an effective and ambitious regulation has to be seized.
AK EUROPA Position Paper: Digital Markets Act
AK EUROPA: Digital Markets Act: AK demands improvements
AK EUROPA: Joint letter from LobbyControl, Digitalcourage, CEO and AK on the Digital Markets Act
AK EUROPA: Facebook whistleblower at the European Parliament
Netzpolitik.org: Private life online: Should we ban personalised adverts? (German only)