On June 6, 2023 the Commission launched a consultation[1] on a draft template for the compliance report that gatekeepers will have to submit under the Digital Markets Act[2] (“DMA”).[3]
The Draft Compliance Report Under The DMA
The Commission will designate the so-called gatekeepers under the DMA by September 6, 2023. Gatekeepers under the DMA are companies that create bottlenecks between businesses and consumers, and have an entrenched position in digital markets.[4]
Upon designation, gatekeepers will have six months to provide the Commission with a report describing, in a detailed and transparent manner, the measures which they have implemented to comply with the DMA. In particular, the draft template for the compliance report requests gatekeepers to provide:
- Information about the gatekeeper and its compliance function.
- Information on substantive compliance with the DMA obligations, including: (i) how the gatekeeper assessed its compliance with the DMA (e.g., whether it conducted an internal or external audit); and (ii) the measures the gatekeeper put into place to comply, supported by underlying data and internal documents. In particular, the template lists 19 categories of information that should be included “at minimum” for each measure in place, including e.g., the situation prior to the implementation of the measure, the timeframe within which measure was implemented, its geographic scope, and the technical/engineering changes the measure required. This information must be provided in a separate and standalone annex for each core platform service of the reporting gatekeeper.[5]
- Information about the role and function of the gatekeepers’ head of compliance and compliance officers, as well as the strategies and policies for managing and monitoring effective compliance.
Gatekeepers must also provide a non-confidential summary of the compliance report which will allow third parties to provide the Commission with “meaningful input” on the gatekeeper’s compliance with the DMA.
Gatekeepers will have to update their compliance report annually.
Consultation and Enactment
The draft template lays out a catch-all approach to ensure effective compliance through the periodic reporting obligations under the DMA. Interested parties have until July 5, 2023 to submit their observations on the Commission’s draft template for the compliance report—only two days after the deadline for undertakings to notify the services which may lead them to be designated as gatekeepers under Article 3 DMA.[6] This consultation will enable the Commission to finalize the template compliance report.
The Commission expects the DMA compliance reports to play an important role in assessing gatekeepers’ effective compliance with the DMA obligations.[7] The Commission can also rely on these reports to decide whether to use its investigatory powers and open proceedings to potentially adopt a non-compliance decision.[8]
While burdensome for gatekeepers, these first reports are expected to shape their reporting obligations and likely ground gatekeepers’ relations with the Commission. Acting in the context of a paradigm shift in the regulation of digital markets, the Commission should ensure that its enforcement responsibility is balanced with the principles of proportionality and necessity.
[1] The consultation and the draft template for the compliance report are available on the Commission’s website, at https://ec.europa.eu/eusurvey/runner/dma_compliance.
[2] Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828, O.J. 2022 L 265/1.
[3] See Commission News, “DMA: Commission launches a consultation on the template for compliance report,” June 6, 2023, accessible here.
[4] Specifically, a company will be designated as a “gatekeeper” under the DMA if it meets the three cumulative thresholds set out in Article 3(3) DMA: i.e., (i) it has a significant impact on the internal market; (ii) it provides a core platform service which is an important gateway for business users to reach end users; and (iii) it enjoys an entrenched and durable position, in its operations, or it is foreseeable that it will enjoy such a position in the near future.
[5] Core platform services are types of online services that act as a gateway between a large number of users and businesses. Article 2(2) DMA contains a list of such services, which includes search engines, social networks, operating systems, web browsers, online advertising services, and cloud computing services.
[6] The template Form Gatekeeper Designation (“Form GD”) is set out in Annex I of the Commission Implementing Regulation (EU) 2023/814 of April 14 2023 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, O.J. 2023 L 102/6.
[7] Set out in Articles 5-7 DMA.
[8] Pursuant to Article 29(1) DMA.