On December 9, 2022, the Commission launched a public consultation on its draft Implementing Regulation for the Digital Markets Act (“DMA”).[1] The draft DMA Implementing Regulation, with its two annexes, governs the notification process for gatekeepers, the submission to and assessment of information by the Commission, and access to file. The consultation ran until January 9, 2023 and 27 stakeholders submitted their observations. The Commission will now review the feedback it received and plans on adopting the DMA Implementing Regulation in the first quarter of 2023.

Background

The DMA entered into force on November 1, 2022 and will be applicable as of May 2, 2023. Article 3 of the DMA requires potential gatekeepers[2] to notify the Commission and provide the necessary information that will facilitate the Commission’s assessment of a formal “gatekeeper” designation. Article 46 of the DMA empowers the Commission to adopt implementing acts setting out the application of the specific provisions of the DMA, in particular in terms of content, and methodology. The DMA Implementing Regulation sets out the form, content, length, timing, and other specific aspects of the notification that potential gatekeepers must submit to the Commission under Article 3 of the DMA.

Notifications and submission of information to the Commission

The DMA Implementing Regulation lays out detailed arrangements for the notification and submission of information to the Commission for gatekeeper designation. Specifically:

• Annex I sets out the information that each notification under Article 3 of the DMA must contain (the “Form Gatekeeper Designation” or “Form GD”). Notably, potential gatekeepers must provide an exhaustive list of their Core Platform Services (“CPS”)[3] as they define them, but also any “plausible alternative delineation” of each of these CPS.[4] Annex I also states that all information provided under Article 3 must be “correct, complete and not misleading.” Failing that, the Commission could open proceedings against the undertaking and impose a fine of up to one percent of its total worldwide turnover in the preceding financial year.
• Taking inspiration from the rules before the Court of Justice, Annex II sets out page limits applicable to submissions. Notifications for each CPS and replies to the Commission’s preliminary findings must not exceed 50 pages, rebuttals can be up to 25 pages long, and reasoned requests for suspensions and exemptions are limited at 30 pages. These limits only apply to potential gatekeepers and not to Commission decisions.

While the pre-notification period started in January 2023, gatekeepers have until early July to formally notify their services to the Commission.

A fine line between procedural efficiency and rights of defense

The draft DMA Implementing Regulation seeks to balance rapid and efficient enforcement and potential gatekeepers’ rights of defense, but often falls short of its ambitions. For instance, gatekeepers can make observations to the Commission on its preliminary findings and potential gatekeepers have a right of access to file after notification of such preliminary findings. Observations on the Commission’s preliminary findings must however be “succinct”, and access to file is only guaranteed for documents expressly mentioned in these preliminary findings. For other documents in the Commission’s file, the list of which will be provided to gatekeepers, the Commission will have the possibility to refuse the companies’ request for access. In addition, and more importantly, there is no role for the Hearing Officer under the DMA, and no right to be heard in relation to the Commission’s decision to designate a company as gatekeeper. These shortcomings in the protection of (potential) gatekeepers’ rights of defense and the administrative discretion left to the Commission may have severe adverse consequences in practice, in light of the severe penalties that can be imposed under the DMA.

[1]      Commission Implementing Regulation on detailed arrangements for the conduct of certain proceedings by the Commission pursuant to Regulation (EU) 2022/1925 of the European Parliament and of the Council (the “DMA Implementing Regulation”).

[2]      The DMA only applies to so-called gatekeepers, which are companies with a significant impact and an entrenched and durable position in the internal market, that provide core platform services as defined in the DMA, and that have been designated as such by the Commission.

[3]      CPS are services that: (i) fit into one of the categories of services defined as constituting CPS by the DMA (e.g., search engines, online intermediation services, social network services, web browsers, virtual assistants, online advertising services); and (ii) have 45 million monthly active end users and 10,000 annual business users in the EU.

[4]      This could be compared to the requirement to assess all possible market definitions in the Form CO submitted to notify mergers to the Commission.