EU Parliament Takes First Step Towards a Fair and Interoperable Market
The EU’s Proposal for a Digital Market Act (DMA) is an attempt to create a fairer and more competitive market for online platforms in the EU. It sets out a standard for very large platforms, which act as gatekeepers between business users and end users. As gatekeepers “have substantial control over the access to, and are entrenched in digital markets,” the DMA sets out a list of dos and don'ts with which platforms will have to comply.
There was a lot to like in the initial proposal: EFF agreed with the DMA’s premise that gatekeepers are international in nature, applauded the “self-executing” nature of many obligations, and supported the use of effective penalties to ensure compliance. Several anti-monopoly provisions showed ambition to end the corporate concentration and revitalize competition, such as the ban on mixing data ((Art 5(a)), the ban on forced single sign-ons (Art 5(e)), the ban on cross-tying (Art 5(f)), and the ban on lock-ins (Art 6(e)).
End-Users Perspective: EFF Pushes for Interoperability
However, we didn’t like that the DMA proposals missed the mark from the end-user perspective, in particular the lack of interoperability obligations for platforms. The Commission met us half-way by introducing a real-time data portability mandate into the DMA, but it failed to go the full distance. Would it lead to a measurable behavioral change of Facebook if frustrated users could only benefit from data portability if they continued being signed up to Facebook’s terms of service? EFF doubt it.
The EU Parliament’s Lead Committee Calls for Interconnection and Functional Interaction
In today’s vote, the Internal Market Committee (IMCO) of the EU Parliament overwhelmingly agreed to preserve most of the proposed anti-monopoly rules and agreed on key changes of the Commission’s Proposal. EFF will analyze them in more details in the coming weeks, but some elements are striking. One is that the Committee opts for an extremely high threshold before platforms will be hit by the rules (market capitalization of at least €80bn) which means that only a few, mainly U.S based, firms would legally be presumed to act as gatekeepers and hold an entrenched and durable position in the internal market. Members of Parliament also agreed on incremental improvements on the ban of mixing data, added clarification on the limits of targeted ads, including substantial protection of minors, and introduced an ambitious dark patterns prohibition in the DMA’s anti-circumvention provision. It also added a prohibition on new acquisitions as a possible punishment for systematic non-compliance with the anti-monopoly rules.
On interoperability, Members of Parliament followed the strong recommendation by EFF and other civil society groups to not settle for the low-hanging fruits of data portability and interoperability in ancillary services. Focusing on the elephant in the room – namely, messaging services and social networks – the DMA’s lead committee proposes key provisions that would allow any providers of “equivalent core platform services” to interconnect with the gatekeeper’s number independent interpersonal communication services (like messaging apps) or social network services upon their request and free of charge. To avoid discrimination, interconnection must be provided under objectively the same conditions and quality that are available or used by the gatekeeper, its subsidiaries, or its partners. The objective is a functional interaction with these services while guaranteeing a high level of security and data protection.
Another positive feature is the DMA’s anti-circumvention provision, which follows EFF’s suggestions by stating that gatekeeper should abstain from any behavior that discourages interoperability by using “technical protection measures, discriminatory terms of service, subjecting application programming interfaces to copyright or providing misleading information.” (Article 6(a)).
The interoperability obligations for gatekeeper come with caveats and question marks. The implementation of the interconnection rules for messaging services is subject to the requirements of the Electronic Communications Code, while those for social networks depend on yet-to-be-defined specifications and standards. The phrasing, too, leaves room for interpretation. For example, the relationship between the obligation to provide interconnection and how to provide it (“same conditions available or used”) is unclear and could lead to restrictions in practice. On the other hand, the Preamble of the DMA is makes the legislative intent crystal-clear. It explains that “the lack of interconnection features can affect users’ choice and ability to switch due to the incapacity for end user to reconstruct social connections and networks provided by the gatekeeper.” Providers of alternative core platform services should thus be allowed to interconnect. For number-dependent intercommunication services, this means that third-party providers can request interconnection for features “such as text, video, voice and picture;” for social networking services, this means interconnection on basic features “such as posts, likes, and comments”.
Next Steps: Vote and Negotiations
It’s now the job of the EU lawmakers to put this objective into a clear and enforceable language. The text approved in committee will be submitted for vote to the full House in an upcoming plenary session and the Council of the EU, whose position is much less ambitious, must also agree on the text for it to become law. EFF will continue pushing for rules that can end corporate concentration.
The article was first published here.