Overview
I. Introduction
The European Commission (Commission) keeps stressing the important role of “business users” under the Digital Markets Act (DMA).[1] Business users are at the core of the DMA, with its Article 1(1) stating: “The purpose of this Regulation is to contribute to the proper functioning of the internal market by laying down harmonized rules ensuring for all businesses, contestable and fair markets in the digital sector across the Union where gatekeepers are present, to the benefit of business users and end users.”[2]
The designation of gatekeepers under Article 3 DMA and the review of their status under Article 4 DMA are based on criteria related to the existence of business users. The DMA indeed places the interests of third parties, primarily business users, at the core of its functioning. The obligations listed in Article 5 and 6 DMA impose restrictions on gatekeepers which explicitly aim to protect business users. Article 12 DMA, with respect to updating obligations for gatekeepers, makes a special provision for extending this obligation for the benefit of business users, with its para 5 providing for updating the obligations on gatekeepers if any negative impact on business users appears.
As highlighted by the prominent mention of business users in the DMA’s recitals, a substantial level of protection and enforcement has been introduced for their benefit. This is reflected by a series of legal tools available for them to improve their legal and business situation vis-à-vis gatekeepers. These tools have already been used by certain business users with noticeable results, and this trend will likely continue and gain more speed in the coming months.
II. Legal tools available to business users
In case of non-compliance by gatekeepers with specific duties, the DMA contains several important tools for business users. Just to name a few of them, Article 8(6) DMA enables third parties to provide comments on preliminary findings which the Commission has published in proceedings opened under Article 20 DMA. Article 9(4) DMA provides for the consideration of third parties’ interests in suspension requests made by gatekeepers. Article 19(2) DMA provides for the consultation of business users in investigations into new services and practices, also under 101 and 102 TFEU. Article 27 DMA allows third parties to report on any practice or behavior by gatekeepers that falls within the scope of the DMA. Article 29(4) DMA states that the Commission may consult third parties when adopting non-compliance decisions. This facilitates communication between business users, national authorities, and the Commission in instances of non-compliance, ensuring a consistent line of dialogue and engagement.
Based on all these procedures and on consultations with business and end users, the Commission will be, and already has been, responsive to concerns expressed when opening proceedings against gatekeepers under Article 20 DMA. The investigations started on March 25, 2024 are the result of workshops conducted in the presence of third parties and of numerous complaints, in which business users have articulated their adverse experiences stemming from the non-compliance by designated gatekeepers.
III. Practical outcome achieved so far
- Self-preferencing
One of the first workshops[3] held by the Commission already yielded positive results for business users. It was focused on identifying self-preferencing practices and compliance with the self-preferencing prohibition. Involved in this workshop were several business users, e.g. Expedia Group (expedia.com, hotels.com, vrbo.com and trivago.com), EU Travel Tech Association (Skyscanner, eDreams, Booking and TripAdvisor), Heureka!Group, Yelp, and JobIndex. All of them proposed compliant solutions, yielding positive and practical results and suggestions with respect to Google searches, but leaving full compliance unconfirmed. After the compliance deadline, the Commission however decided to initiate proceedings against Alphabet due to for self-preferencing its own vertical search services, such as Google Shopping and Google Hotels, over similar services provided by business-users.[4]
These proceedings are potentially advantageous for business users and end users. The workshop offered market actors a platform to voice their concerns and collaborate with the Commission. Through this process, they were able to present plausible strategies and proposals for a more equitable treatment of search results, if any violations of the DMA are found. This should generate a positive outlook for business users when dealing with gatekeepers, as the prospect of penalties for non-compliance are a hefty deterrent. In parallel, the Commission is collating information on gatekeepers’ potential self-preferencing practices. Moreover, the Commission has adopted orders addressed to several designated gatekeepers, obliging them to preserve documents that could potentially be instrumental in evaluating their compliance to the DMA's obligations.
- Interoperability
On February 27, 2023, the Commission convened a workshop focused on interoperability[5], during which practical guidance was shared by business users including Cisco, Mozilla, EDRi, Matrix, and Wire. These had the opportunity to propose solutions to ensure interoperability. The primary focus of the businesses in attendance was on messaging applications, with business users playing instrumental roles in the development of new standards for gatekeepers.
In a related development, the Commission recently granted Meta a six-month period to achieve compliance with the interoperability requirement for Facebook Messenger under Article 7(3) DMA. This decision followed the launch of a non-compliance investigation on March 25, 2024[6]. Further promising developments for business-users include Meta's move to make WhatsApp interoperable with other messaging services[7], and Google's decision to allow EU users to choose the services with which they wish to share their data[8].
While no formal non-compliance proceedings have been initiated regarding this provision, this also indicates a promising trend for business users, which may be attributed to the successful outcomes of the Commission's workshop, as well as the sustained pressure exerted by third parties.
- Anti-steering, in-app payment systems and sideloading
The workshop of 6 March 2023 was centered around app development[9] and gatekeepers such as Apple's and Google's app stores, attracting noteworthy contributions from industry experts. In recent months, Spotify has been caught in a dispute with Apple over allegedly exorbitant commission fees for in-app purchases. Initially, the Commission sided with Spotify, agreeing that the App Store's commission, reaching nearly 30% in some instances, stifled innovation and restricted consumer choice. This resulted in a €1.84 billion fine for Apple under Article 102 TFEU. The dispute has now resurfaced with Spotify aiming to improve pricing plans and enhance user experience. The Commission is currently examining whether Apple's new policy complies with its court order. Simultaneously, Apple is under scrutiny due to the DMA[10].
As a gatekeeper, Apple has begun permitting developers in the EU to utilize alternative payment options and distribute apps through different app stores, subject to Apple's new business terms and a novel Core Technology Fee. The Commission investigation against Apple initiated on March 25, 2024[11], which could result in enforcement action, is favorable news for Spotify as a business user.
Apple has also made additional amendments in response to its obligations under the DMA by announcing modifications to their rules in the EU, including a 0.50 euro Core Technology Fee. These new policies, which are slated to apply to iPadOS this fall, provide smaller developers with more avenues to avoid the app store fees. The latest iOS 17.5 beta update facilitates EU users to download apps from the web, in compliance with the DMA's sideloading requirements.
Additionally, the third-party iOS app store AltStore PAL is now operational in the EU due to Apple's compliance with the DMA. While this is the only app store launched since Apple's adherence to DMA obligations, both the Epic Games Store and MacPaw’s Setapp have been announced[12]. This is particularly beneficial for Epic Games, who can now launch their own app store following a complaint to the Commission[13], demonstrating the Commission's willingness to protect business users.
In parallel, Apple began allowing iPhone users to select their default browser as part of its DMA compliance. As a result, business users such as Opera have seen a significant increase in new EU users, as a consequence of the DMA. Opera reported a 164% surge in new iOS users from March 5 to 7, 2024, with substantial user growth in specific countries, e.g. 402% in France and 143% in Spain[14]. Similar growth was observed by other browsers like Brave and Firefox who also reported a user increase following Apple's default browser changes in the EU, with more than 50% in Germany and nearly 30% in France.
IV. Preliminary conclusions
The DMA, in combination with input from business users, has already instigated significant behavioral adjustments by several designated gatekeepers. The Commission has demonstrated a robust receptiveness to the perspectives and input of third parties, such as business users and end users.
The ongoing investigations, though yet to conclude, showcase the DMA's impact on the EU's digital market. This brings a significant shift in the regulation of these digital markets, particularly enhancing opportunities for business users to achieve a more competitive and innovative market.
This can be regarded as first signs of potential success of the DMA, and more can be expected if business users understand and activate the new tools at their disposal.
[1] Regulation (EU) 2022/1925 of the European Parliament and the Council of 14.9.2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act), available here.
[2] Emphasis added; according to Article 2(21) DMA, ‘business user’ means any natural or legal person acting in a commercial or professional capacity using core platform services for the purpose of or in the course of providing goods or services to end users.
[3] “DMA workshop - Applying the DMA’s ban on self-preferencing: how to do it in practice?” 5 December 2022, European Commission, available here.
[4] Commission, Press Release IP/24/1689 of 25.4.2024.
[5] “DMA workshop - The DMA and interoperability between messaging services” 27 February 2023, European Commission, available here.
[6] Press Release, “Commission opens non-compliance investigations against Alphabet, Apple and Meta under the Digital Markets Act” 25 March 2024, available here.
[7] Roth E, “Here’s how WhatsApp plans to interoperate with other messaging app” (The Verge, 6 February 2024), available here.
[8] Khalid A, “Google will now let EU users select which services share their data, thanks to the DMA” (The Verge, 12 January 2024), available here.
[9] “DMA workshop - The DMA and app store related provisions,” ?” 6 March 2023, European Commission, available here.
[10] Roth E, “Why Spotify is still fighting with Apple in Europe” (The Verge, 9 May 2024), available here.
[11] Press Release, “Commission opens non-compliance investigations against Alphabet, Apple and Meta under the Digital Markets Act” 25 March 2024, available here.
[12] Porter J and Ricker T, “Third-party iPhone app store AltStore PAL is now live in Europe” (The Verge, 17 April 2024), available here.
[13] Roth E, “Epic Games just got unbanned by Apple — again” (The Verge, 8 March 2024), available here.
[14] Roth E, “Opera’s mobile browser is getting a lot of new users in the EU” (The Verge blogpost, 18 March 2024), available here.
