On December 15, the European Commission (Commission) proposed drafts of two landmark digital legislative packages — the Digital Markets Act (DMA), which proposes new competition rules for so-called “gatekeeper” platforms to address alleged unfair practices and make them more contestable by competitors, and the Digital Services Act (DSA), which recommends revamping content moderation rules for “very large online platforms.”
The new rules, if they pass into law in their current form, would impose a stringent regulatory regime on Big Tech and give the Commission new enforcement powers. The draft regulations foresee severe fines for noncompliance — up to 10% of a company’s global revenues under the DMA and up to 6% under the DSA. The Commission would also be able to impose structural remedies, such as obliging a gatekeeper to sell all or part of a business, on companies that repeatedly engage in anticompetitive behavior prohibited by the DMA.
The proposals mark the beginning of a legislative process that is likely to be controversial and hotly contested, as there are marked differences of opinion on whether these proposals go too far, do not go far enough, or are necessary at all in light of preexisting competition powers.