Regulation of digital markets: How the DMA is changing competition!

Regulation of digital markets: How the DMA is changing competition!

In a current study carried out by scientists at the University of Passau, Google's immense advertising power is discussed. The main author Alexander Witte emphasizes that the goal is not to dismantle the company, but to resolve existing conflicts. The study argues that Google should stop managing advertising budgets for other website operators' advertising space. One of the key changes would be the elimination of Google's own entity that bids on the "open web" and sets the auction rules. This could also result in Alphabet selling its bidding platform Display & Video 360, while Google Ads will only be used for its own advertising inventory.

The proposed changes would allow Google to market its reach without being perceived as a neutral seller on the open web. This would eliminate the conflict of interest between the auction organizer and participants. These measures would also significantly reduce the official control effort. Professor Dr. Jan Krämer, the chair of Internet and telecommunications economics at the University of Passau, advises decision-makers at European and international levels, including the British government on the TikTok dispute. Krämer's recently published study examines the impact of Digital Markets Act (DMA) regulations on innovation and consumer well-being.

The Digital Markets Act

The Digital Markets Act came into force on March 7, 2024 and aims to regulate powerful digital platforms and create a fair playing field. Together with the Digital Services Act, it forms a uniform set of rules for the entire EU. The DMA aims to promote transparency and competition in digital markets by ensuring that gatekeepers do not abuse their market power. These gatekeepers are companies that operate core platform services and have significant influence on the internal market.

The criteria that require designation as a gatekeeper by the EU Commission include, among other things, the operation of a central platform service that offers other companies access to end users, as well as a consolidated market position. The affected services include online brokerage services such as Amazon and Booking.com, app stores and online search engines such as Google. Consumers should benefit from fair competition conditions, although the effects will be felt gradually.

Gatekeepers’ behavioral obligations

Companies defined as gatekeepers are subject to strict behavioral obligations set out in articles of the DMA. These include, among others:

• Die Verpflichtung, Geschäftskunden nicht daran zu hindern, ihre Produkte auch auf anderen Plattformen zu anderen Konditionen anzubieten.
• Das Verbot, Endnutzern den Zugang zu Inhalten zu verwehren, die sie über den Plattformdienst erworben haben.
• Die Pflicht, Endnutzern das Entfernen vorinstallierter Software zu ermöglichen.
• Die Gewährleistung von fairen Bedingungen für den Zugang zu App-Stores und sozialen Netzwerken.
• Die Einhaltung von Datenschutzstandards, die eine Verarbeitung personenbezogener Daten nur mit Zustimmung der Endnutzer erlauben.

These measures aim to create a framework that controls the growth of digital gatekeepers and ensures that competition in digital markets remains fair. The discussion about the regulation of digital platforms makes it clear that innovative approaches are needed to counteract the growing dominance of such companies. As Die Digitalagentur reports, this could not only strengthen competition, but also have a positive impact on market diversity and innovative strength.

Overall, the complex debate surrounding the Digital Markets Act and the recommendations of the Passau study show that the issue of digital rights and competitive fairness is of crucial importance today.