DMA Insights Series #2: Putting flesh on the DMA’s bones: draft Implementing Regulation out for feedback

The EU's Digital Markets Act's long-awaited draft implementing regulation was published on Friday. This comes on the heels of the DMA’s entry into force in November 2022 and a stakeholder workshop hosted by the EC early in December on the DMA’s rules governing self-preferencing as the Commission gears up for the DMA to take practical effect from May 2023. Gatekeepers and third parties will also need to act fast if they want to make their thoughts known on the draft. The Commission has set a deadline of 6 January for comments, meaning a busy Christmas period for some.

Practical aspects of implementation - key features

The implementing regulation will address many of the practical aspects of DMA’s implementation including the notification process for gatekeepers, access to the Commission’s file and the right to be heard for both gatekeepers and third parties; as well as the formalities around time limits, formats and word counts under the Act.

A few key features jump out at first read:

• Introduction of the Form “GD”: The draft is also accompanied by a draft notification form for firms whose services trigger a mandatory notification under the Act. The form provides would-be gatekeepers with welcome practical guidance on how to engage with the Commission ahead of the Act coming into practical effect in May. At the same time, the stipulation that gatekeepers notify “any plausible delineation” of services which potentially trigger a mandatory notification is likely to be highly burdensome and suggests an awful lot of ink will be spilt debating how exactly a “core platform service” is delineated under the Act.
  
  
• Confidentiality vs transparency: Consistent with the EU’s antitrust rules, the draft contains protections for confidential information provided by gatekeepers and third parties under the Act. However, it also mandates that third party responses to consultations are presumed to be non-confidential and may be made public if the Commission has stipulated as such. A rule which indicates an intent for more open regulatory processes than typically occur under the EU’s antitrust rules where third-party information is also typically kept confidential by the Commission.
  
  
• Access to file: The draft also puts flesh on the bones for when gatekeepers can access the Commission’s file when it is taking regulatory decisions, including determining the practical implications of gatekeepers’ obligations and investigating them for breaches. In particular, the regulation codifies the Commission’s use of “confidentiality rings”, expanding and reinforcing gatekeepers’ access to confidential information deemed necessary for their defence subject to appropriate protections, albeit still affording the Commission significant discretion in ultimately determining whether confidential information of third parties should be disclosed to gatekeepers to exercise their rights of defence.
  
  
• Oral hearings and the right to be heard: The implementing regulation largely tracks the antitrust rules in offering gatekeepers the right to respond in writing to its decisions. However, in contrast to the EU’s antitrust rules, it does not contain a right to an oral hearing. Its exclusion is certainly likely to streamline proceedings. However, for more consequential regulatory decisions oral hearings  enable gatekeepers, as well as third parties, to test their arguments before a wider audience as well as make public the facts of the case in more detail. In so doing, they are intended to facilitate more robust regulatory decision-making as well as greater transparency. A key question for the final version is whether the procedural efficiencies of omitting oral hearings altogether outweighs those benefits.

The page limits for submissions will be an interesting regulatory experiment in whether shorter submissions result in faster decision-making under Act.

Next steps

Linklaters is carefully reviewing this draft and will provide thorough feedback to the Commission. Our detailed assessments will be made available in our Digital Markets Act Hub - a one-stop shop providing the key developments you need to know about the DMA to help you navigate the changing regulatory landscape.