EU's New Proposal Law In Digital Markets

Last week, the European Parliament and the Council of the EU created a draft law on digital markets to end certain practices of large platforms. Thus, the Commission will be allowed to carry out market investigations and sanction non-compliant behaviours.

This legal act (2020/0374(COD)) will set rules on what companies with “gatekeeper” status can or cannot do in the EU.

Subjective scope of application

The proposed Regulation will apply to the major companies providing so-called “core platform services”, such as social networks, online advertising services, search engines, operating systems, among others, for frequently incurring unfair practices. In general, all the ones designated as “gatekeepers” include Google, Apple, Amazon, etc.

However, the companies will be included as gatekeepers only when they meet certain conditions. For now, the requirement has been agreed that these companies must, in principle, provide a central platform service in at least three EU countries and have at least 45 million monthly end users, as well as more than 10,000 commercial users.

Measures imposed to end unfair competition.

The Regulation has made sure to put some limits on the use of data for targeted advertising, intending to comply with the General Data Protection Regulation fully.

Gatekeepers must, when placing third-party advertising in their services or for their commercial purposes, refrain from combining personal data to targeted advertising “, except in cases where there is a clear, explicit, renewed and informed consent.

The toughening of the rules stand out when the personal data correspond to minors. In this case, the processing of personal data for commercial purposes is unacceptable.

The consequences of non-compliance and infringements of this Regulation

In the case of non-compliance, the Commission has the power to impose severe sanctions. As expressly stated in the draft law, fines can be “not less than 4% and not exceeding 20%” of its total worldwide turnover in the preceding financial year.

Current status of the legal proposal

The draft law was voted in committee on November 23, and on November 30, the committee presented the report to the plenary on the 1st. Now it is awaiting Parliament’s position in 1st reading.

The indicative date of the plenary session is determined for December 13.

This draft law is included in the list of legislative priorities for 2021, and the European Parliament, Council of Europe and the European Commission want to ensure substantial progress on this issue. 

1.https://www.europarl.europa.eu/news/es/press-room/20211118IPR17636/digital-markets-act-ending-unfair-practices-of-big-online-platforms.

2.https://oeil.secure.europarl.europa.eu/oeil/popups/thematicnote.do?id=2066000&l=en