Europe’s new digital competition law, the Digital Markets Act (DMA), seeks to tame big tech’s market power by imposing on the digital giants a list of positive and negative obligations. The DMA will give European business users and end users (consumers) new rights in relation to so-called ‘gatekeepers’, or hard to avoid digital companies, including Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft, which were designated as gatekeepers by the European Commission on 6 September 1 See European Commission press release of 6 September 2023, https://ec.europa.eu/commission/presscorner/detail/en/IP_23_4328. . These companies must comply with the obligations from 6 March 2024.
The DMA makes it possible to challenge the gatekeepers and change the market conditions by lowering entry barriers for third-party products and services. However, the DMA does not force users to exercise their rights, nor does it force changes in the market. It empowers users of gatekeepers’ services with new rights and it is this, if those rights are asserted, that could reshape the market.
To ensure effective compliance, it would be beneficial if gatekeepers can provide compliance indicators that prove that measures they have taken to comply with the DMA empower users in line with the DMA obligations. This will allow gatekeepers and the Commission to assess effectiveness over time.
The DMA is an objective-based regulation to ensure contestability and fairness (Article 1 and Recitals 32 and 33 DMA). Contestability refers to the ability to overcome entry barriers, while fairness refers to the ability to challenge the imbalance between the rights and obligations of gatekeepers and business users by enabling the latter to capture the benefits of their innovations and efforts. End users then benefit because the DMA gives them more choice in terms of using third-party offerings, and more control in relation to gatekeepers’ products. The DMA does this by imposing on gatekeepers a list of 22 positive and negative obligations (Articles 5, 6 and 7 DMA), which apply to 10 core platform services (CPSs), such as online search engines like Google Search (Article 2 DMA) 2 See European Commission press release of 6 September 2023 (footnote 1) for the full list of designated CPSs. .
The European Commission is the sole enforcer of the regulation (Recital 91 DMA). Gatekeepers must prove that the measures they implement empower users, but, critically, not that they produce changes in market conditions (Article 8 DMA). Gatekeepers are thus only responsible for ensuring the new rights can be exercised. Neither the gatekeepers nor the Commission can force market participants to exercise their rights.
For instance, if a gatekeeper properly enables the use of third-party app stores on its operating system (Article 6(4) DMA), but no market participants decide to develop a third-party app store, then a gatekeeper cannot be held responsible for the absence of a change in market conditions. The Commission cannot assume that the gatekeeper has not effectively complied with the DMA obligation.
Gatekeepers must report to the Commission, starting in March 2024, outlining how they comply with the DMA objectives. Reports should include detailed and transparent accounts of the measures they implement to ensure compliance with the list of obligations (Article 11 DMA). But indicators of market changes are unlikely to be required, for the reasons set out below.
The Commission has already issued a draft report template 3 ‘Template for Reporting Pursuant to Article 11 of Regulation (EU) 2022/1925 (Digital Markets Act)’, available at: https://digital-markets-act.ec.europa.eu/system/files/2023-06/DMA%20template%20-%20Compliance%20report_consultation.pdf. . While this does not yet have a legal effect, it highlights the information gatekeepers must provide for each CPS and each obligation. Among other information, the draft requires gatekeepers to provide outcome indicators about changes in market conditions, such as data on the evolution of the number of active end users and active business users for the relevant CPS. However, these indicators are not fully informative about whether gatekeepers effectively comply with the DMA. There is, therefore, a need for compliance indicators that do not rely on outcomes.
Developing compliance indicators
Some indicators have already been proposed. They refer to the effects on the market of the measures implemented (de Streel et al, 2022), or the actions of business users or end users engaging with gatekeepers (Feasey and de Streel, 2023). Both sets of indicators assess whether users exercise their rights and if this has had consequences in terms of changes in the market. However, such indicators can only be informative if there is a direct link between the change and the exercise of the user’s rights, and if the indicators clearly define a target with an end-date to achieve it, which the DMA does not require. Furthermore, the indicators are not informative about compliance or non-compliance when users do not exercise their rights, nor do they indicate whether gatekeepers properly empower users (eg gatekeepers could use manipulative techniques, impose undue requirements or withhold mandatory information).
This does not mean that these indicators are not important from a policy perspective to assess whether the DMA results in changes to market conditions, provided there is a clear causal link between the DMA obligations and market changes.
However, the above limitations mean there are insufficient indicators to assess compliance. From a legal, economic and policy perspective, only compliance indicators can inform the Commission that gatekeepers effectively comply.
From a legal perspective, compliance indicators enable the Commission to monitor and assess whether gatekeepers provide actionable measures that ensure compliance. From an economic perspective, they provide testable evidence that the measures empower users as intended. Finally, from a policy perspective, they inform policymakers that the DMA changes the behaviours of the gatekeepers as intended and reveals the preferences of users in terms of choice. If users choose not to exercise their rights, policymakers cannot assume that the DMA does not work.
Against this backdrop, compliance indicators that assess user empowerment should refer to how gatekeepers engage with business users and end users. The DMA gives gatekeepers flexibility in implementing these obligations (Article 8 DMA). Gatekeepers should thus develop compliance indicators that enable them to monitor how their measures comply with the DMA, in line with the intentions of the legislators in the recitals and the provisions. Gatekeepers are free to conduct their own businesses (Recital 109 DMA, which refers to the fundamental right to conduct a business). Besides, because of information and resource constraints, the Commission cannot prescribe every aspect of gatekeeper behaviour, such as the design of the choice screen for user consent (Article 5(2) DMA).
Compliance indicators should firstly provide details about the information users receive about their rights, as users can only exercise their rights if they know about them. Some DMA provisions, such as on data-combination restrictions (Article 5(2) DMA), require gatekeepers to inform users proactively, while others do not. In the former case, gatekeepers must prompt users to take action; in the latter case, gatekeepers must simply inform users in a relevant document.
Other data should show that gatekeepers provide information in concise, easily accessible and clearly understandable language. Users should understand their rights and be able to exercise them without facing manipulative behaviour from gatekeepers, such as complex interface design or deceptive warning messages that aim at withholding information, preventing users from exercising their rights or steering them according to the gatekeepers’ best interests. In other words, the information provided should prevent gatekeepers from circumventing the obligation in line with the anti-circumvention requirement (Article 13 DMA).
Moreover, gatekeepers should provide indicators showing that they provide specific information about given requirements and explain how users can exercise their rights in this context. The DMA specifies the content of some rights, such as end users being able to withhold consent as easily as they give it (Recital 37 DMA), or implies that gatekeepers provide specific information, such as technical information on interoperability to access business user data continuously and in real-time (Article 6(10) and Recital 60 DMA).
Finally, some indicators should monitor implementation by gatekeepers of technical measures, such as interoperability between certain messaging services (Article 7 DMA). Gatekeepers should then provide indicators that their measures work technically, such as by providing indicators that show they offer an application programming interface (API) to ensure interoperability.
Gatekeepers should support their compliance indicators with evidence that they are effective in empowering users. In other words, they should prove that their indicators show that users can exercise their rights in line with the DMA. This evidence could include consumer surveys, tests or other studies, and relevant contractual or technical documents to show that users are aware of and can easily exercise their rights. This also implies that gatekeepers implement an internal system to process and monitor users’ exercise of their rights over time.
In particular, gatekeepers should monitor and mitigate any behavioural biases that obstruct users from exercising their rights (Thaler and Sunstein, 2021). For instance, status-quo bias would see users stick to the default option, making it harder for users from choosing freely. Information overload could make choices difficult because of excessive information. Similarly, gatekeepers should monitor and mitigate any technical or other issues that might prevent users from properly exercising their rights. For instance, technical issues might arise with interoperability, preventing business users from accessing data. It follows that any measures implemented and the related indicators should adapt to user behaviour and issues raised during their implementation.
In turn, the Commission should assess the measures implemented. In this context, the Commission will rely on the information gatekeepers provide, such as compliance indicators. However, this could result in asymmetric information with gatekeepers having more information than the Commission, preventing the Commission from carrying out its monitoring function (Cabral et al, 2021). To deal with this, the Commission can request information (Article 21 DMA) and carry out interviews (Article 22 DMA) and inspections (Article 23 DMA). It can also impose an obligation to retain all documents deemed to be relevant for compliance assessments (Article 26 DMA). Finally, the Commission can specify the form, content and other details of the regulatory report (Article 46 DMA), as it has done with its draft report template. However, even with these powers, the Commission is still at a disadvantage as gatekeepers possess internal information and know better than the Commission which information is relevant for assessing compliance.
Against this backdrop, the Commission should first rely on the information that gatekeepers make publicly available to users in order to enable them to exercise their rights. In assessing compliance, the Commission could also request assistance from independent external experts and auditors, and national competent authorities (Article 26 DMA). In this context, the Commission could work with national competent authorities that develop technological tools to monitor compliance indicators. For instance, in France, the Centre of Expertise for Digital Platform Regulation (Pôle d’Expertise de la Régulation Numérique, PEReN) has developed a tool to monitor the evolution of platforms’ terms and conditions. The Commission could work with PEReN to develop a similar tool to monitor compliance indicators and their evolution over time.
Cabral, L., J. Haucap, G. Parker, G. Petropoulos, T. Valletti and M. Van Alstyne (2021) The EU Digital Markets Act, A Report from a Panel of Economic Experts, European Commission Joint Research Centre, Luxembourg: Publications Office of the European Union, available at https://data.europa.eu/doi/10.2760/139337
de Streel, A., J. Crémer, P. Heidhues, D. Dinielli, G. Kimmelman, G. Monti, R. Podszun, M. Schnitzer and F.M. Scott Morton (2022) ‘Enforcing the Digital Markets Act: Institutional Choices, Compliance, and Antitrust’, Policy Discussion Paper No. 7, Tobin Center for Economic Policy at Yale, available at http://dx.doi.org/10.2139/ssrn.4314848
Feasey, R. and A. De Streel (2023) ‘DMA Output Indicators’, Draft Issue Paper, Centre on Regulation in Europe, available at https://cerre.eu/wp-content/uploads/2023/07/CERRE-Draft-Issue-Paper-DMA-Output-Indicators.pdf
Thaler, R. and C. Sunstein (2021) Nudge: The Final Edition, Penguin
 See European Commission press release of 6 September 2023, https://ec.europa.eu/commission/presscorner/detail/en/IP_23_4328.
 See European Commission press release of 6 September 2023 (footnote 1) for the full list of designated CPSs.
 ‘Template for Reporting Pursuant to Article 11 of Regulation (EU) 2022/1925 (Digital Markets Act)’, available at: https://digital-markets-act.ec.europa.eu/system/files/2023-06/DMA%20template%20-%20Compliance%20report_consultation.pdf.