The risks of the Digital Markets Act
20 July 2023
In July 2023 the European Commission starts the process of designating gatekeepers on digital markets. Large digital companies deemed to have a large user base and a strong economic and intermediation position on the internal market will have to comply with certain “do’s” and “don’ts” in their daily operations. The new rules imposed by the Digital Markets Act are expected to bring unintended consequences for users and curb technology innovation and start-ups with rapid growth potential.
By pre-defining obligations and bans for tech companies, the Digital Markets Act marks a turning point in competition policy. From now on the digital markets for platform users, business clients and technology start-ups will increasingly be shaped by the regulatory interventions rather than consumer preferences and market processes.
For example, digital companies classified as gatekeepers may no longer treat their own services or products in their core platform service more favourably than similar services or products offered by third parties on the gatekeeper’s platform. Also, big techs may not prevent their users from un-installing any pre-installed software or application if they wish so.
Analysis shows that enforcement of the new obligations is likely to increase costs for endusers and business clients, reduce the supply and quality of services, and slow down the development of innovation- and technology-driven start-ups with strong growth potential. These outcomes will largely result from the new regulatory interventions rather than from business decisions driven by consumers and market processes.Download PDF Policy-brief-DMA-ENG
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