Overview of Regulation (EU) 2022/1925 — Digital Markets Act
The Digital Markets Act (DMA) is a regulatory framework established by the European Union to address anti-competitive practices within digital markets. Enforced on 1 November 2022, the DMA became fully applicable on 2 May 2023, targeting large digital platforms known as gatekeepers. These platforms hold significant market power due to their user base, turnover, or capitalization, often leading to monopolistic behaviors that stifle competition and innovation. The DMA aims to create a fairer digital economy by preventing abuse of dominance and fostering market contestability.
The regulation applies to 22 core platform services across six companies: Alphabet (Google), Amazon, Apple, ByteDance, Meta (Facebook), and Microsoft. These services span sectors such as online search engines, social networks, video sharing platforms, communication services, advertising, operating systems, and cloud computing. The DMA imposes strict obligations on these gatekeepers, including prohibitions on data combination across services, restrictions on self-preferencing, and mandates for interoperability, portability, and user choice. Non-compliance can result in fines of up to 10% of a company’s global turnover, with repeated violations potentially doubling this penalty.
The DMA’s provisions are designed to dismantle barriers that prevent smaller competitors from entering the market. For example, gatekeepers are prohibited from pre-installing their own apps or services on devices, bundling services in ways that disadvantage rivals, or using data from one service to advantage another. Additionally, the regulation ensures that businesses and end-users can easily switch between platforms, access data, and remove pre-installed software.
Key Provisions and Their Impact on AI and Digital Assistants
The DMA’s provisions extend beyond traditional digital services to include virtual assistants and search engines, which increasingly rely on AI-driven functionalities. This has significant implications for companies developing AI-powered tools, as the regulation imposes constraints on how these platforms rank, recommend, and combine data.
The DMA also mandates interoperability for messaging services, allowing users to communicate across different platforms. While social networks are exempt from this requirement, the principle of interoperability sets a precedent for future regulations that may extend to AI-driven communication tools. The regulation further prohibits gatekeepers from imposing restrictions on the use of third-party virtual assistants or search engines, ensuring users have genuine choices in how they interact with digital services.
Since the regulation’s implementation, independent browsers such as Aloha, Vivaldi, Ecosia, and Brave have seen substantial user growth. Aloha Browser reported a 250% increase in EU users within the first month of the DMA’s enforcement, indicating a shift in consumer behavior toward alternatives to dominant platforms. This trend suggests that the DMA’s emphasis on user choice and competition is beginning to yield tangible results, particularly in sectors where gatekeepers previously held near-exclusive control.
Legislative Background and Implementation Process
The DMA was proposed by the European Commission in December 2020 as part of its broader digital strategy, alongside the Digital Services Act (DSA). The proposal was developed under the Von der Leyen Commission, with Executive Vice President Margrethe Vestager and Commissioner Thierry Breton leading the initiative. The legislative process involved negotiations between the European Parliament, the Council of the European Union, and the Commission, culminating in a political agreement in March 2022. The final text was adopted by the Parliament and Council in July 2022 and published in the Official Journal of the EU on 12 October 2022, entering into force on 1 November 2022.
The DMA builds on existing EU competition policies, particularly Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), which address anti-competitive agreements and the abuse of dominant positions. However, the regulation was necessitated by the unique challenges posed by digital markets, where traditional competition rules often fail to address structural issues such as network effects, data monopolies, and platform dominance. The DMA complements other EU digital policies, including the General Data Protection Regulation (GDPR), which governs data privacy, and the Platform-to-Business (P2B) Regulation, which ensures fair trading practices for smaller businesses on online platforms.
The identification of gatekeepers was a critical step in the DMA’s implementation. Companies were required to report to the European Commission within six months of the regulation’s applicability (by 2 May 2023) to determine whether they met the criteria for designation as gatekeepers. The Commission had up to 45 days to assess these reports, after which designated gatekeepers were given six months to comply with the DMA’s obligations. As of 7 March 2024, all identified gatekeepers must fully adhere to the regulation’s provisions.
Scope and Sector-Specific Obligations
The DMA targets eight core platform services (CPS) where gatekeepers exert significant influence over market contestability. These sectors include online search engines (e.g., Google Search), online intermediation services (e.g., app stores), social networks (e.g., Facebook), video sharing platforms (e.g., YouTube), communication services (e.g., WhatsApp, Gmail), advertising services (e.g., Google Ads), operating systems (e.g., Android, iOS), and cloud services (e.g., Amazon Web Services). Each sector is subject to specific obligations designed to mitigate anti-competitive behaviors, such as self-preferencing, data siloing, and bundling.
This rule directly impacts AI-driven search assistants, which must now compete on merit rather than relying on preferential placement. Similarly, in the advertising sector, gatekeepers are restricted from using non-public data collected from one service to advantage their own advertising tools.
The DMA also addresses the pre-installation of software and services on devices, a practice that has long favored gatekeepers like Apple and Google. Under the regulation, users must have the option to uninstall pre-installed software and choose alternative browsers, virtual assistants, or search engines. Additionally, the DMA mandates interoperability for messaging services, enabling users to communicate across different platforms—a development that could influence the design of AI-driven communication tools in the future.
Enforcement and Compliance Mechanisms
The DMA establishes a robust enforcement framework to ensure compliance with its provisions. The European Commission is responsible for monitoring gatekeepers’ adherence to the regulation, with the authority to impose fines of up to 10% of a company’s global turnover for first-time infringements. Repeated violations can result in fines of up to 20% of global turnover, providing a strong disincentive for non-compliance.
The DMA’s focus on user choice and market fairness has already begun to yield measurable outcomes. Similarly, the prohibition on self-preferencing has forced gatekeepers to reevaluate their business practices, leading to more equitable treatment of third-party services.
Required actions
- No self-preferencing in ranking, indexing or crawling; apply fair, non-discriminatory ranking conditions - No combining personal data across services without consent, including for training or personalisation - Interoperability, data-portability and choice-screen duties; virtual assistants are a designated core platform service