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Week Ahead (3 July)

Monday, 3 July – Deadline for gatekeepers to notify Commission of their status under the DMA

Tech companies qualifying as gatekeepers under the Digital Markets Act (DMA) will have to notify the European Commission of their status as ‘gatekeepers’ by midnight today. If they fail to do so, the Commission may initiate the process. According to Olivier Guersent, the head of DG COMP, there has not been a significant number of filings thus far.

Following its publication in the EU Official Journal last October, the DMA becomes applicable under EU law from tomorrow. The DMA, together with the Digital Services Act (DSA), is part of the European Commission’s landmark Digital Services Package. The purpose of the DMA is to regulate the digital market by preventing Big Tech companies, referred to as ‘gatekeepers’, from abusing their dominant market positions, and opening competition to smaller competitors. The European Commission would have the power to investigate the actions of gatekeepers and fine them up to 10% of their global turnover from the preceding year if they are found to be in breach of the DMA. As part of this process, digital platforms will have to provide the Commission with detailed information on the core platform services they provide as well as their last three years of annual turnover, market value and the EU member countries they operate in. This will also include the number of users and businesses operations on their platforms.

The advantage of a shorter notification period is that it benefits the notifying party. Thus, it is expected that most filings will come today on the deadline day. However, a complete lack of self-notification could be problematic. The DMA allows for fines of up to 1% of annual turnover for companies that fail to notify or provide the Commission with necessary information for assessing their designations. The Commission will have 45 working days (until 6 September 2023) to verify the designations. Designated gatekeeping platforms will then have six months to get their services into compliance, until 6 March 2024, when enforcement of the obligations begins. Companies that notify and meet the gatekeeper criteria will be listed here.

On Tuesday, the Court of Justice of the EU (CJEU) will rule on the antitrust legal dispute of the Federal Cartel Office (FCO), the German competition watchdog, with Meta (C-252/21 Meta Platforms).

In 2019 the FCO concluded that Facebook (Meta) had abused its market powers, ordering the company to stop collecting users’ data without their consent. Meta appealed against the decision, criticising the authority for overstepping its bounds. Last September, CJEU Advocate General Athanasios Rantos issued a non-binding opinion on the legal dispute between Facebook and the Bundeskartellamt (FCO), suggesting that the FCO should be allowed to take stock of breaches of the EU data protection rules when assessing the company’s compliance with competition rules. Nevertheless, the opinion also highlighted that competition authorities cannot overstep their powers by making their own assessments on whether privacy violations have occurred, which should be separately addressed by privacy regulators.

In the aftermath of the non-binding opinion, Meta’s spokesperson reacted by stating that the company is waiting for the final judgment before determining its next steps. Despite being legally non-binding, the Advocate’s opinion has been viewed as a test of how far antitrust regulators can go, ahead of next week’s final decision on the case. In other words, the Court next week will have to rule on whether the German competition watchdog exceeded its authority by addressing data protection concerns, having previously noted that examining the company’s compliance with the GDRP could ‘’be an important indication of whether that conduct amounts to a breach of competition rules’’.

Meanwhile, earlier in June, the FCO announced that Meta will be implementing changes to its Accounts Center feature on the platform. These changes will give users the option to control whether their data is tracked across Meta's apps and sites, including WhatsApp and Instagram. While the exact nature of these changes and their visibility is not yet clear, it has been confirmed that disabling tracking will affect the functionality of the platform. Users who choose to turn off the feature may not be able to cross-post content across platforms.

On Tuesday, the European Commission will present a new law to boost enforcement of the General Data Protection Regulation, which came into force across the EU on 25 May 2018.

In order to address criticisms of the GDPR’s slow enforcement and leniency, the new law is expected to set common procedural rules to improve how national privacy authorities cooperate in cross-border cases including investigations into multinational companies such as Meta, Amazon, and Google. The latest announcement comes after the European Data Protection Board (EDPB), last year sent the Commission a “wish list” of changes to improve the enforcement of the GDPR.

According to the Commission, the new plan “will strengthen public confidence in the GDPR by facilitating a swifter resolution of investigation and reducing the number of disagreements between data protection supervisory authorities in cross-border cases”.

On Thursday, the European Commission will have to determine whether to greenlight Amazon's $1.7bn acquisition of iRobot, an automated vacuum maker, or proceed with a further investigation (Phase 2).

In February, the European Commission launched a formal probe (Phase 1) into the deal, assessing whether the proposed acquisition could give Amazon dominance in the smart home market, where home appliances and services can be controlled digitally. Earlier this month, the UK Competition and Markets Authority (CMA) decided to greenlight the merger after launching its own formal probe into the deal in April, concluding that the deal would not have any adverse effects on competition within the UK market. However, reports suggest that the deal will most likely face a full-scale four-month antitrust investigation by the EU. The company has a final opportunity in the coming days to persuade the EU competition watchdog that the deal promotes competition, although the chances of success are slim and is unlikely it chooses to offer any remedies during the initial phase.

The $1.7 billion deal, announced last August, has drawn broader criticism on both sides of the Atlantic. Various stakeholders in Europe have called for the deal to be blocked, with civil society groups warning that the merger could result in a loss of horizontal competition, data protection risks, and illegal tying practices by Amazon. In the US, more than 20 civil rights and data privacy organisations sent a letter to the Federal Trade Commission in September, calling the potential acquisition ‘’a privacy and competition threat’’. More specifically, they claimed that it could provide Amazon with access to a vast amount of ‘’incredibly detailed consumer data’’, including the room layouts and the number of rooms in customers’ houses.

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