The DMA is a complex and experimental regulation. Its enforcement will be extremely complicated and it’s up to the EU lawmakers to make the right choices and avoid unintended consequences.
The EU lawmakers are negotiating the final version of the Digital Markets Act, the DMA in its abbreviation form, a regulatory experiment at the crossroad between competition policy, fair trading practices and infrastructure regulatory approaches. It will bring significant changes to the digital ecosystems that software developers rely on. Some could have positive effects for them, but there will also be many negative spillover effects that we have already drawn attention to.
The DMA is a complex regulation, and knotty enforcement, legally and technically, is easily foreseeable. Appropriate safeguards and regulatory dialogue are essential, therefore. We noticed that, in the first rounds of negotiations, the co-legislators considered safety and security safeguards. We strongly encourage them to work further on these. The best approach would be to ensure general safeguards that will allow comprehensive consumer protection and cybersecurity.
A good example of the complex and experimental nature of the DMA is the European Parliament’s amendment on default settings. The objective is to increase consumer choice and opportunities for gatekeeper’s competitors. A commendable objective, but the devil is in the details. In this case, the challenges of enforcement and the unsolvable problem of whose defaults will win out and why.
There are many questions on how such an obligation could be applied and what the effects would be. On one hand, consumers should have their choice. On the other hand, they shouldn’t be overburdened with myriad choice screens. We know from our experience and research on the Android ecosystem that having one app on their device does not stop users from downloading and using a similar app that does a similar function. Practicality is of the essence.
In the same vein, to preserve an optimal user experience while following the regulation objectives, one could assume that the obligation would cover main core services such as search engines, web browsers, app stores or messaging apps. Too many, and consumers will lose patience. Too few, and the regulation’s purpose gets lost. In either case, new devices will likely have far fewer apps out of the box. The EU lawmakers will come up with their own choice, of course.
The outcome of the experiment will thus largely depend on consumers’ preferences. It will depend at the same time on regulators’ choice for populating the options lists for those choice screens. This is the quintessence of the complex enforcement of the DMA. How many options should a user be presented with? How many and which web browsers, search engines or messaging services should be on those choice screens? Should we add digital assistants, mapping, or translation? In which order shall they be presented? This leads to the evident conclusion that such an obligation cannot be directly implemented by gatekeepers under art. 5, it needs to be further specified in the regulatory dialogue, so its place is in art. 6. A small change, but one that could avoid failure.
How about the impact on small developers? Presented with app choices that consumers recognise, alongside others they don’t, isn’t going to boost startups. The gatekeeper’s competition might, but now ambitious and innovative competitors would have to disrupt not one, but six or seven apps for example. Or maybe lawmakers would enhance the discoverability of European apps. Again, it all depends on enforcement and the EU regulators’ choices.
The moral here is that regulation this broad should encourage the lawmakers to be more humble in their approach, not more aggressive, and to build in plenty of flexibility and opportunities for adaptation. The worst possible outcome would be an antagonistic, rigid regulation that cannot possibly be enforced or adapted to make it better.