DMA (Digital Marketers Act)

DMA (Digital Marketers Act)

The Digital Markets Act (DMA) is a key European Union regulation aimed at curbing monopolistic behavior and ensuring fair competition between digital platforms. The Act represents a major breakthrough in the regulation of large technology companies and affects many aspects of digital marketing, user privacy, and competition.

For marketers, the DMA has major implications as it affects the ways in which companies can use digital tools and platforms for their activities (or the data from them). In what follows, we look at the key aspects of DMA and their implications for marketing strategies.

The purpose of DMA

The DMA was created to counter several specific problems that have arisen as a result of the dominance of large technology giants, known as gatekeepers. These companies control essential digital platforms, which allows them to influence markets, restrict innovation, and prevent fair competition (and thus cannot restrict innovation and prevent new competitors from entering the market because it is threatening to them).

The DMA seeks to regulate these potential negative impacts and practices and establish clear rules of the game.

When was the Digital Markets Act (DMA) created?

The Digital Markets Act (DMA) was formally adopted by the European Parliament and the Council of the EU and came into force on 1 November 2022. The rules came into force on 2 May 2023. This act is a key step in the regulation of large digital platforms and ensures a fairer competitive environment in the EU digital market.

What are gatekeepers?

The DMA defines gatekeepers as large online platforms that have a significant impact on the internal market, act as a key interface for users, and have the ability to lock in businesses and consumers. To be classified as a gateway, a platform must meet specific criteria such as exceeding €6.5 billion in revenue over the last three years or being a dominant platform with more than 45 million monthly active users in the EU and 10,000 annual active business users (all three conditions must be met simultaneously, meeting only one or two conditions is not sufficient for a platform to be classified as a gateway).

Further changes have subsequently come into force, increasing the potential fine from the original €6.5 billion to €8 billion – this change came into force on 2 November 2023 following the adoption of the final DMA by the European Parliament and the Council of the EU.

The Digital Market Act (DMA) applies to all companies that supply digital services in the EU, whether they are based in the EU or not. This includes:

  • Online platforms – these are platforms that connect users with third-party products and services such as e-commerce platforms, social networks, and search engines. Examples of online platforms include Amazon, Facebook, and Google.
  • Large online intermediaries – are online platforms with a turnover of at least €8 billion per year and at least 45 million monthly active users in the EU. Examples of large online intermediaries include Amazon, Apple, Facebook, Google and Microsoft.
  • Product/price comparison sites – are websites that allow users to compare prices and features of products and services. Examples of comparison sites include Google Shopping, but also services such as Skyscanner.
  • Large online advertising providers – these are companies that sell advertising on online platforms. Examples of large online advertising providers include Google (with its Google Ads) Meta (Meta/Facebook Ads), X, Bing, etc.
    Obligations for gatekeepers

The DMA imposes a number of obligations on gatekeepers to ensure that their platforms remain open and fair. These obligations include:

Ensuring interoperability – gateways must enable interoperability of their services with other services, allowing users to move more easily between different platforms.

Prohibiting data misuse – gateways must not misuse data collected from different sources to create unfair advantages. The DMA prohibits certain conduct that could harm competitors or consumers, such as processing data collected from competitors or preventing users from switching platforms or services. It prohibits them from favoring their own services or products. These obligations are designed to ensure that other businesses can compete fairly and innovate in an already very complex competitive environment. In short, Google and other big players must be able to demonstrate that they can actually use the data sent from your websites.

Algorithm transparency – companies must disclose how their algorithms rank and recommend content to ensure the process is fair and transparent. These policies also define how these companies can collect and use data, which also affects how marketing campaigns can be targeted and measured.

Data protection, user privacy, and implications for the entire digital ecosystem

The DMA places great emphasis on data protection and user privacy, an area that is particularly sensitive for marketers. The legal framework that the DMA creates requires marketers to be much more careful about how they collect and use user data. This has major implications for personalization and ad targeting, which has hitherto been seen as key to effective digital marketing.

This will require marketers to experiment more with new forms of digital marketing that respect privacy and comply with regulations, while still remaining effective.

The changes required by the DMA may require marketers to redesign existing practices, tools, and technologies. The new tools should be able to effectively manage user consent, and properly process data according to the new rules while enabling effective marketing campaigns and results. As a result, marketers (or the owners of the companies they work for) will need to consider further investment in technologies that are able to dynamically adapt to changes in this legislation. Adapting to these changes requires an understanding of the new rules, flexibility in approaches, and a willingness to innovate – and to do so quite quickly.

While the DMA only directly affects the European Union, its impact can be global. Large platforms that operate globally can embrace change at a global level to avoid the need to implement different systems for different markets. This means that marketers outside the EU should also be aware of the DMA and prepare for possible changes.

And what will be likely the real impact?

Leaving aside the fact that the environment will be more transparent and the user can have more say and influence over what data is collected about them there will be a whiplash on the big companies that benefit most from this (Google, Facebook, etc.), ultimately it will probably have an impact on the price of the services themselves that small or medium-sized businesses provide. Because all of these adjustments (within the website, in internal/external documents, in campaigns, and ultimately because of the negative impact on campaign results, the need to use consultants/legal advice/consulting firms or if a smaller business manages these activities themselves = still costing them time and therefore money) will need to be reflected in the end prices. So, in short, the consumer/end user will pay for it again.

Because the rules themselves, even though they are being modified and amended over time, are already becoming completely opaque to the average business person and in some cases, from my point of view, are just creating more and more obstacles and making marketing/overhead more expensive for companies. Over time, this will all become so opaque due to the various currencies, amendments, and additions that the average business person will get lost in them and not be able to keep track of them. In addition, the individual rules are already sometimes so contradictory that even the various legislative branches often do not have set uniform procedures, and so everything is dealt with in a wait-and-see style in another exemplary case.

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