EUROPEAN COMMISSION Brussels, 15.12.2020 COM(2020) 842 final 2020/0374(COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on contestable and fair markets in the digital sector (Digital Markets Act) (Text with EEA relevance) {SEC(2020) 437 final} - {SWD(2020) 363 final} - {SWD(2020) 364 final}



EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL •Reasons for and objectives of the proposal Digital services have brought important innovative benefits for users and contributed to the internal market by opening new business opportunities and facilitating cross-border trading. Today, these digital services cover a wide range of daily activities including online intermediation services, such as online marketplaces, online social networking services, online search engines, operating systems or software application stores. They increase consumer choice, improve efficiency and competitiveness of industry and can enhance civil participation in society. However, whereas over 10 000 online platforms operate in Europe’s digital economy, most of which are SMEs, a small number of large online platforms capture the biggest share of the overall value generated. Large platforms have emerged benefitting from characteristics of the sector such as strong network effects, often embedded in their own platform ecosystems, and these platforms represent key structuring elements of today’s digital economy, intermediating the majority of transactions between end users and business users. Many of these undertakings are also comprehensively tracking and profiling end users. A few large platforms increasingly act as gateways or gatekeepers between business users and end users and enjoy an entrenched and durable position, often as a result of the creation of conglomerate ecosystems around their core platform services, which reinforces existing entry barriers. As such, these gatekeepers have a major impact on, have substantial control over the access to, and are entrenched in digital markets, leading to significant dependencies of many business users on these gatekeepers, which leads, in certain cases, to unfair behaviour vis-à-vis these business users. It also leads to negative effects on the contestability of the core platform services concerned. Regulatory initiatives by Member States cannot fully address these effects; without action at EU level, they could lead to a fragmentation of the Internal Market. Unfair practices and lack of contestability lead to inefficient outcomes in the digital sector in terms of higher prices, lower quality, as well as less choice and innovation to the detriment of European consumers. Addressing these problems is of utmost importance in view of the size of the digital economy (estimated at between 4.5% to 15.5% of global GDP in 2019 with a growing trend) and the important role of online platforms in digital markets with its societal and economic implications. Although some of these phenomena specific to the digital sector and to core platform services are also observed to some extent in other sectors and markets, the scope of the proposal is limited to the digital sector as there the problems are the most pressing from an internal market perspective. Weak contestability and unfair practices in the digital sector are more frequent and pronounced in certain digital services than others. This is the case in particular for widespread and commonly used digital services and infrastructures that mostly directly intermediate between business users and end users. The enforcement experience under EU competition rules, numerous expert reports and studies and the results of the OPC show that there are a number of digital services that have the following features: (i) highly concentrated multi-sided platform services, where usually one or very few large digital platforms set the commercial conditions with considerable autonomy; (ii) a few large digital platforms act as gateways for business users to reach their customers and vice-versa; and (iii) gatekeeper power of these large digital platforms is often misused by means of unfair behaviour vis-à-vis economically dependent business users and customers. The proposal is therefore further limited to a number of ‘core platform services’ where the identified problems are most evident and prominent and where the presence of a limited number of large online platforms that serve as gateways for business users and end users has led or is likely to lead to weak contestability of these services and of the markets in which these intervene. These core platform services include: (i) online intermediation services (incl. for example marketplaces, app stores and online intermediation services in other sectors like mobility, transport or energy) (ii) online search engines, (iii) social networking (iv) video sharing platform services, (v) number-independent interpersonal electronic communication services, (vi) operating systems, (vii) cloud services and (viii) advertising services, including advertising networks, advertising exchanges and any other advertising intermediation services, where these advertising services are being related to one or more of the other core platform services mentioned above. The fact that a digital service qualifies as a core platform service does not mean that issues of contestability and unfair practices arise in relation to every provider of these core platform services. Rather, these concerns appear to be particularly strong when the core platform service is operated by a gatekeeper. Providers of core platform providers can be deemed to be gatekeepers if they: (i) have a significant impact on the internal market, (ii) operate one or more important gateways to customers and (iii) enjoy or are expected to enjoy an entrenched and durable position in their operations. Such gatekeeper status can be determined either with reference to clearly circumscribed and appropriate quantitative metrics, which can serve as rebuttable presumptions to determine the status of specific providers as a gatekeeper, or based on a case-by-case qualitative assessment by means of a market investigation. The identified gatekeeper-related problems are currently not (or not effectively) addressed by existing EU legislation or national laws of Member States. Although legislative initiatives have been taken or are under consideration in several Member States, these will not be sufficient to address the problems. Whilst such initiatives are limited to the national territory, gatekeepers typically operate cross-border, often at a global scale and also often deploy their business models globally. Without action at EU level, existing and pending national legislation has the potential to lead to increased regulatory fragmentation of the platform space. The objective of the proposal is therefore to allow platforms to unlock their full potential by addressing at EU level the most salient incidences of unfair practices and weak contestability so as to allow end users and business users alike to reap the full benefits of the platform economy and the the digital economy at large, in a contestable and fair environment. The need to address these concerns in the digital economy was stressed in the Commission Communication ‘Shaping Europe’s digital future’ which considered that, ‘based on the single market logic, additional rules may be needed to ensure contestability, fairness and innovation and the possibility of market entry, as well as public interests that go beyond competition or economic considerations’. It also announced that the Commission ‘will further explore,(…), ex ante rules to ensure that markets characterised by large platforms with significant network effects acting as gatekeepers, remain fair and contestable for innovators, businesses, and new market entrants’. •Consistency with existing policy provisions in the policy area This proposal builds on the existing P2B Regulation, without conflicting with it. The definitions used in the present proposal are coherent with that Regulation, in particular the definitions of ‘online intermediation services’ and ‘online search engines’. In addition to the baseline of transparency and fairness rules applicable to all online platforms regardless of their size or position introduced in the P2B Regulation, the present proposal establishes clearly defined obligations vis-a-vis a very limited number of cross-border providers of core platform services that serve as important gateways for business users to reach end users. Finally, the Commission can benefit in its enforcement of those obligations from the transparency that online intermediation services and online search engines have to provide under the P2B Regulation on practices that could be illegal under the list of obligations if engaged in by gatekeepers. The proposal is also fully coherent with the proposal for a Digital Services Act (‘DSA’). The DSA is a horizontal initiative focusing on issues such as liability of online intermediaries for third party content, safety of users online or asymmetric due diligence obligations for different providers of information society services depending on the nature of the societal risks such services represent. In contrast, the DMA proposal is concerned with economic imbalances, unfair business practices by gatekeepers and their negative consequences, such as weakened contestability of platform markets. •Consistency with other Union policies The proposal is coherent with the Commission’s digital strategy in its contribution to ensuring a fair and competitive digital economy, one of the three main pillars of the policy orientation and objectives announced in the Communication ‘Shaping Europe's digital future’. It will constitute a coherent, effective and proportionate framework to address problems in the digital economy that currently cannot be tackled or cannot be tackled effectively.

The proposal complements existing EU (and national) competition rules. It addresses unfair practices by gatekeepers that either fall outside the existing EU competition rules, or that cannot be as effectively addressed by these rules, considering that antitrust enforcement concerns the situation of specific markets, inevitably intervenes after the restrictive or abusive conduct has occurred and involves investigative procedures to establish the infringement that take time. The current proposal minimises the detrimental structural effects of unfair practices ex ante, without limiting the ability to intervene ex post under EU and national competition rules. The proposal is aligned with other EU instruments, including with the EU Charter of Fundamental Rights and the European Convention of Human Rights (‘ECHR’), the General Data Protection Regulation, and the EU’s consumer law acquis. The proposal complements the data protection laws. Transparency obligations on deep consumer profiling will help inform General Data Protection Regulation (‘GDPR’) enforcement, whereas mandatory opt-out for data combination across core platform services supplements the existing level of protection under the GDPR. The proposal clarifies that it is for the gatekeepers to ensure that compliance with the obligations laid down in the Regulation should be done in full compliance with other EU law, such as protection of personal data and privacy or consumer protection. The proposal is also coherent with the targeted and tailor-made ex ante regulation of specific sectors, including the rules applicable to electronic communication services or short-selling as well as with existing initiatives targeting harmful trading practices in the offline world. 2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY •Legal basis Member States apply or are considering to apply divergent national rules to address the problems arising from the significant degree of dependency of business users on core platform services provided by gatekeepers and the consequent problems arising from their unfair conduct vis-à-vis their business users. That situation creates regulatory fragmentation insofar as the rules on addressing unfairness in dependency relationships with such gatekeepers and contestability regarding those services diverge in particular as to the preconditions to intervene and as to the depth of the intervention, and increase compliance costs for companies operating in the internal market. Without action at EU level, this will be further aggravated with the adoption of new initiatives pending in several Member States, whereas in other Member States the unfairness and reduced contestability of core platform services provided by gatekeepers remain unaddressed. Given the intrinsic cross-border nature of the core platform services provided by gatekeepers, regulatory fragmentation will seriously undermine the functioning of the Single Market for digital services as well as the functioning of digital markets at large. Therefore, harmonisation at EU level is necessary and Article 114 of the Treaty on the Functioning of the European Union (‘TFEU’) is the relevant legal basis for this initiative. •Subsidiarity The objectives of the proposal cannot be achieved by Member States acting alone, as the problems are of a cross-border nature, and not limited to single Member States or to a subset of Member States. The digital sector as such and in particular the core platform services provided or offered by gatekeepers are of a cross-border nature, as is evidenced by the volume of cross-border trade, and the still untapped potential for future growth, as illustrated by the pattern and volume of cross-border trade intermediated by digital platforms. Almost 24% of total online trade in Europe is cross-border. Digital players typically operate across several Member States, if not on an EU-wide basis, which, today, is particularly the case for services such as online advertising, online social networking services, online marketplaces, cloud computing services, online search services, video-sharing platform services, number-independent interpersonal communication services or operating systems. Accordingly, the problems identified have Union relevance, as they arise across borders and affect several Member States, thus not being limited to the territory of a Member State. That is in particular the case for core platform services provided or offered by gatekeepers. Even those Member States who have not yet adopted legislation to address unfairness and reduced contestability of core platform services provided or offered by gatekeepers are increasingly considering national measures to that effect. Different national legislation within the EU, besides being insufficiently effective, may lead to increased fragmentation and compliance costs for large market players and the business users that rely on them. At the same time, start-ups and smaller businesses are also negatively impacted by this situation, as it impedes them from scaling-up and from cross-border expansion, thereby reaching new markets, offering better and diversified products at more competitive prices and, as the case may be, growing into challengers of established players in the digital sector. Therefore, by addressing unfair practices in respect of core platform services operated by gatekeepers at Union-level, the functioning of the internal market will be improved through clear behavioural rules that give all stakeholders legal clarity and through an EU-wide intervention framework allowing to address effectively harmful practices in a timely and effective manner. One of the conditions for the designation as gatekeeper is that the provider of core platform services has a significant impact on the internal market. •Proportionality The proposal aims to contribute to the proper functioning of the Single Market for digital services by ensuring that markets across the Union where gatekeepers are present are contestable and fair. This should promote innovation, high quality of digital products and services, fair and competitive prices, and free choice for users in the digital sector. In this context, the proposal focuses only on those digital services that are most widely used by business users and end users (“core platform services”) and where, based on current conditions, concerns about weak contestability and unfair practices by gatekeepers are more apparent and pressing from an internal market perspective. The core platform services in scope are only those where there is strong evidence of (i) high concentration, where usually one or very few large online platforms set the commercial conditions with considerable autonomy from their (potential) challengers, customers or consumers; (ii) dependence on a few large online platforms acting as gateways for business users to reach and have interactions with their customers; and (iii) the power by core platform service providers often being misused by means of unfair behavior vis-à-vis economically dependent business users and customers. The proposal therefore applies only to those providers that meet clearly defined criteria for being considered a gatekeeper, which are set out above. The use of quantitative thresholds, as the basis of a rebuttable presumption, is complemented by the use of qualitative criteria specified in the proposal. That allows the Commission to designate as gatekeepers the providers of core platform services that exhibit the same or similar risks for fairness and contestability of the market and at the same time guarantees that the obligations apply to the relevant providers of core platform services only. The list of obligations foreseen by the proposal has been limited to those practices (i) that are particularly unfair or harmful, (ii) which can be identified in a clear and unambiguous manner to provide the necessary legal certainty for gatekeepers and other interested parties, and (iii) for which there is sufficient experience. The proposal provides for the possibility of a tailored application of some of the obligations through a dialogue between the Commission and the gatekeepers concerned. In addition, it allows to cover in a flexible way additional practices that are similarly unfair or that equally put fairness or contestability at risk after a thorough market investigation on the impact of those practices. This mechanism ensures that there is no over-regulation while at the same time avoiding a lack of intervention in relation to similar practices by the same gatekeepers, where practices may evolve over time. The proposed measures are proportionate since they achieve their objective by only imposing a burden on undertakings in the digital sector in a targeted manner. The proposal requires the cooperation of those companies that are subject to an investigation, but the administrative costs would be proportional and would be unlikely to require significant additional costs in view of the already existing regulatory structures due to the application of other pieces of EU legislation (e.g. EU Merger Regulation; Consumer Protection Cooperation (‘CPC’) Regulation). As regards the compliance costs for gatekeepers, they would be reasonable, since they would largely substitute for the high costs that large providers of core platform services incur for complying with divergent regulatory measures gradually put or likely to be put in place in different Member States. Such costs would imply some additional legal compliance officers to check company policies against the new rules and some employees to interface with the Commission and respond to requests for information. •Choice of the instrument Only a legislative instrument can effectively address the problems identified. A Regulation is in addition necessary, as it is directly applicable in Member States, establishes the same level of rights and obligations for private parties, and enables the coherent and effective application of rules in the inherently cross-border online intermediated trade generated in the online platform economy. This is most suited to address the problems of fairness and contestability identified and prevent fragmentation of the Single Market for core platform services provided or offered by a gatekeeper. 3.RESULTS OF STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

•Stakeholder consultations The Commission has consulted widely on a broad range of online platform-related issues, including the economic power of very large online platforms with a gatekeeping role. First, between 2 June and 8 September 2020, the Commission ran two separate open public consultations which were referring to two separate Inception Impact Assessments for (i) the Digital Services Act package: Ex ante regulatory instrument for large online platforms with significant network effects acting as gate-keepers in the European Union’s internal market; and the other one for (ii) the New Competition Tool. Second, the Commission ran a stakeholder consultation on the interim reports by the Observatory for the Online Platform Economy, supporting the current initiative. Thirdly, workshops, conferences as well as research conducted by the JRC informed the problem definition and helped identify preliminary policy options. In addition to the consultation tools used, the Commission's services also met bilaterally with stakeholders in the context of the public consultations and the feedback period for the inception impact assessments. Finally, a structured dialogue with Member States, notably through the e-Commerce expert group and bilateral and multilateral exchanges and conferences contributed to the design of policy options. In general, the public consultations offered strong support for an intervention tackling unfair practices engaged in by gatekeepers. In fact, the large majority of the respondents to the public consultations and to a separate questionnaire addressed to national competition authorities agreed that there are structural problems that cannot be addressed under the existing competition rules; the same majority believed that the Commission should be able to intervene in markets where gatekeepers are present. This view was expressed by a large majority of businesses and business associations, all civil society organisations (including Non-Governmental Organisations (‘NGOs’) and trade unions) and all public authorities. Consumer organisations like BEUC have also prominently flagged the particular concerns surrounding online platforms and digital markets. Those respondents considered that an intervention tackling these concerns would both create the right innovation incentives, and contribute to increased consumer choice paving the way for new platforms and innovative and privacy-friendly services. Online platforms were split on the issue, with the majority of large online platforms and their representative associations questioning the need for a new gatekeeper instrument. On the other side, many small and medium sized platforms, in particular those that are business users of large online platforms, expressed their support for a new gatekeeper instrument. Those disagreeing referred to the fact that the concept of a gatekeeper is too broad and should instead be assessed on a case-by-case basis and that the Commission can already intervene in the case of the conduct of a gatekeeper contravening Article 102 TFEU. However, the Commission considered that Article 102 TFEU is not sufficient to deal with all the problems associated with gatekeepers, given that a gatekeeper may not necessarily be a dominant player, and its practices may not be captured by Article 102 TFEU if there is no demonstrable effect on competition within clearly defined relevant markets. Moreover, Article 102 TFEU does not always allow intervening with the speed that is necessary to address these pressing practices in the most timely and thus most effective manner. The vast majority of respondents also considered that dedicated rules on platforms should include prohibitions and obligations for gatekeeper platforms. They also suggested that remedies could be more procedural in nature rather than prescribing a given course of conduct. The large majority of stakeholders believed that the proposed list of problematic practices, or “blacklist”, should be targeted to clearly unfair and harmful practices of gatekeeper platforms. As regards the definition of a gatekeeping position, the stakeholder views were split. Some platforms argued that incorporating different services into the offering of a single platform company says little about the strength of a platform, as would also be the case for the ability to leverage assets from one area to another. It was suggested that gatekeeper designations should be business model agnostic, gatekeeper assessments should be reviewed periodically, gatekeeper designations should apply to identified activities, and some rules should apply on a sector-wide basis. In general, stakeholders of all categories pointed out the need to ensure a high level of coherence and legal certainty, the need to ensure that the criteria used to identify gatekeepers should be transparent, objective and easily measurable. Users mostly referred to a combination of both quantitative and qualitative criteria. National Authorities expressed their support for a new gatekeeper instrument and the need for an EU-level approach to avoid regulatory fragmentation, whilst emphasizing the importance of involving the responsible national government representatives in the legislative project in advance. Civil society and media publishers also strongly supported a new gatekeeper instrument. Both called for an adequate degree of transparency in the market as well as the guarantee of a certain degree of media diversity and the respect of consumers' autonomy and choice. • Collection and use of expertise The present initiative is supported by an impact assessment study and several external support studies. In addition, several public consultations and multiple studies and reports were carried out by the Commission or external contractors between 2018 and 2020. The Observatory for the Online Platform Economy supported by its expert group of 15 academic experts as well as by a large support study, provided a number of reports and analytical papers feeding into the work on the definition of problems. In-house economic research as well as policy design support by the Joint Research Centre (‘JRC’) further informed the Impact Assessment underlying this initiative. Member States were in addition consulted through an online consultation, which fed into a meeting of the e-commerce expert group dedicated to this initiative. Finally, the Commission organised a number of conferences, workshops and meetings with academic experts, whose views have contributed to the problem framing and evidence collection strategy. A number of Member States’ position papers on gatekeeper platforms, as well as numerous reports and studies from countries outside the EU, all contributed to the shaping of the instrument. •Impact assessment The Impact Assessment underpinning the proposal was considered by the Commission's Regulatory Scrutiny Board, which issued a positive opinion on 10 December 2020. The opinion of the Board, the recommendations and an explanation of how they have been taken into account are included in Annex 1 of the Staff Working Document accompanying this proposal. Annex 3 provides an overview of who would be affected by this proposal and how. The Commission examined different policy options to achieve the general objective of the present initiative, which is to ensure the proper functioning of the internal market by promoting effective competition in digital markets and in particular a contestable and fair online platform environment. In order to address the problems stemming from problematic gatekeeper conduct, three main policy options were compared: Option 1 - Pre-defined list of gatekeepers and self-executing obligations; Option 2 - Partially flexible framework of designation and updating of obligations, including regulatory dialogue for the implementation of some; and Option 3 - Flexible option based exclusively on qualitative scoping thresholds. Each of these options left more detailed design choices open for political consideration, for example around the precise combination and level of the quantitative scoping thresholds to be used or the exact scope of the remedies available in case of a systematic non-compliance with the obligations by the designated gatekeeper.

All options envisaged implementation, supervision and enforcement at the EU level by the Commission as the competent regulatory body. Given the pan-European reach of the targeted companies, a decentralised enforcement model does not seem to be a conceivable alternative, including in light of the risk of regulatory fragmentation that the initiative is meant to address, nor would it be proportionate given the limited number of gatekeepers that would be in scope of the proposed framework. However, to integrate the national expertise in the platform economy, the initiative envisages that the Commission consults before taking certain decisions (e.g. on non-compliance; fines) a committee composed of representatives of Member States – the Digital Markets Advisory Committee. The preferred option (Option 2) is constituted by (a) a closed list of core platform services; (b) a combination of quantitative and qualitative criteria to designate providers of core platform services as gatekeepers; (c) directly applicable obligations, including certain obligations where a regulatory dialogue may facilitate their effective implementation; and (d) a possibility for the Commission to update the instrument, following a market investigation, as regards the obligations for gatekeepers, by way of delegated acts insofar as new practices are identified that are equally unfair and likely to impair contestability and through amending proposals in the other cases. Market investigations may also point to the need for an amendment of the list of core platform services. This option was considered to be able to address in the most effective way the objectives of this initiative. It provides for timely intervention for all the identified problematic practices, while allowing for some of these a regulatory dialogue for implementing measures by the designated gatekeeper. It further allows tackling new unfair practices, thus enabling to address market failures in the dynamically changing digital environment. At the same time, for those gatekeepers that are foreseen to have an entrenched and durable position in their operations in the near future, but who do not yet enjoy such a position, the proposal identifies a proportionate sub-set of obligations that are particularly relevant to safeguard and enhance contestability. The preferred option will increase the contestability of core platform services and the broader digital sector, and it will help businesses overcome the barriers stemming from market failures or from gatekeepers’ unfair business practices. This will help to foster the emergence of alternative platforms, which could deliver high-quality, innovative products and services at affordable prices. Fairer and more equitable conditions for all players in the digital sector would allow them to take greater advantage of the growth potential of the platform economy. The benefits can be expected to lead to a greater innovation potential amongst smaller businesses as well as an improved quality of service, with associated increases in consumer welfare. The improved contestability of core platform services under the preferred option has the potential to yield a consumer surplus estimated at EUR 13 billion, i.e. an increase of around 6% as compared to the baseline scenario. The main cost relates to compliance costs for gatekeepers as a result of the new rules. Businesses other than gatekeeper platforms may incur certain administrative costs when complying with information requests. These latter costs are, however, unlikely to represent a substantial increase from compliance costs businesses would otherwise incur due to information requests in EU competition law cases or under different specific national rules. The impacts of the policy options on different categories of stakeholders (gatekeepers, competitors, business users, consumers, regulatory authorities) are explained in detail in Annex 3 of the Impact Assessment supporting this initiative. The annex also assesses the impact of each obligation per stakeholder category impacted. The assessment is both quantitative and qualitative to the extent possible. Concerning the impact of the initiative on SMEs, since they are very unlikely to qualify as gatekeepers and would not be targeted by the list of obligations, this initiative would not impose an additional burden on them. The new rules, by levelling the playing field would instead allow SMEs (including business users and other providers of core platforms services) to grow throughout the internal market as a result of the removal of important barriers to entry and expansion. It could be expected that the measures envisaged would also result in more competition among platforms for business users. This is expected to lead to higher quality services at more competitive prices, coupled with a higher productivity. Business users would also have more confidence in selling online, as they would be protected from unfair practices. A more comprehensive enforcement toolkit will allow businesses to thrive on the merits of their abilities. This will result in economic growth, which in turn translates into higher tax revenues for national administrations. The burden on the Commission for implementing this initiative is low (mainly redeployment of existing job positions) compared to the benefits for the economy. National authorities would have to bear some minor administrative costs. Fairness and enhanced contestability in the digital sector would result in higher productivity, which would translate into higher economic growth. The promotion of greater contestability of core platform services and digital markets is also of particular importance in increasing trade and investment flows. •Regulatory fitness and simplification This proposal lays down measures that will apply to large providers of core platform services that meet the conditions to be designated as gatekeepers. Other providers of core platform services and of ancillary services, business users and end users will benefit from the clearly defined and circumscribed obligations that are laid down therein. The proposal also specifically aims at facilitating the sustainable growth of core platform services and the platform economy more broadly and is designed to be fully technologically-neutral. •Fundamental rights The proposal is aligned with the EU Charter of Fundamental Rights, the European Convention on Human Rights (‘ECHR’) as well as the GDPR. The introduction of the dynamic updating of unfair practices would be subject to ensuring a full respect for the fundamental rights to fair proceedings and good administration as enshrined in the ECHR, which are binding on the EU institutions. When acting under the new framework the Commission’s investigation powers would be subject to the full scope of fair process rights such as the right to be heard, the right to a reasoned decision and access to judicial review, including the possibility to challenge enforcement and sanctioning measures. These rights apply in case of administrative proceedings. Moreover, the fair and trusted legal environment that this proposal aims to create shall contribute to safeguarding an appropriate balance between the respective freedoms to conduct a business of providers of core platform services and their business users (Article 16 of the Charter of Fundamental Rights of the European Union). 4.BUDGETARY IMPLICATIONS In order to optimally achieve the objectives of this initiative, it is necessary to finance a number of actions both at the Commission level, where the redeployment of 80 FTEs is envisaged, and at Member State level through their active participation in the Digital Markets Advisory Committee, composed of the representatives of Member States. The total financial resources necessary for the implementation of the proposal in the 2021-2027 period will amount to EUR 81,090 million, including EUR 50,640 million of administrative costs and EUR 30,450 million entirely covered by the allocations foreseen in the MFF 2021-27 under the financial envelopes of the Single Market Programme and the Digital Europe Programme. The financing will support inter alia activities such as carrying out the designation of providers of core platform services, carrying out market investigations and performing any other investigative actions, enforcement actions and monitoring activities. The financing will also support carrying out a regular review of specific elements of the Regulation and an evaluation of the Regulation, a continuous evaluation of the effectiveness and efficiency of the measures implemented, as well as costs linked to maintaining, developing, hosting, operating and supporting a central information system. A detailed overview of the costs involved is provided in the “’financial statement” linked to this initiative. 5.OTHER ELEMENTS

•Implementation plans and monitoring, evaluation and reporting arrangements Given the dynamic nature of the platform economy, the monitoring and evaluation of the initiative constitutes an important part of the proposal. It also responds to explicit demands by stakeholders, including Member States, for a dedicated monitoring function, and reflects the importance given to a self-standing monitoring policy option considered in the Inception Impact Assessment. The monitoring therefore will be divided into two parts: (i) continuous monitoring, which will report on the latest developments in the market every second year, potentially involving the EU Observatory of the Online Platform Economy, and (ii) operational objectives and specific indicators to measure them. Regular and continuous monitoring will cover the following main aspects: (i) monitoring on scope-related issues (e.g. criteria for the designation of gatekeepers, evolution of the designation of gatekeepers, use of the qualitative assessment in the designation process); (ii) monitoring of unfair practices (compliance, enforcement patterns, evolution); and (iii) monitoring as a trigger for the launch of a market investigation with the purpose of examining new core platform services and practices in the digital sector. The monitoring will also take due account of the conceptual work of the Expert Group of the Online Platform Economy under its work stream on Measurement and Economic Indicators. The effectiveness and efficiency of the proposal will in addition be monitored using pre-defined indicators to establish whether additional rules, including regarding enforcement, may be required to ensure that digital markets across the EU are contestable and fair. Consequently, the impact of the intervention will be assessed in the context of an evaluation exercise and activate, if so required, a review clause, which will allow the Commission to take appropriate measures, including legislative proposals. Member States will also provide any relevant information they have that the Commission may require for the evaluation purposes. •Detailed explanation of the specific provisions of the proposal Chapter I sets out the general provisions, including the subject matter, aim and scope of the Regulation, including its harmonising effect in relation to certain national laws (Article 1), and the definitions of the terms used in, as well as the objectives of the proposal (Article 2). Chapter II contains the provisions concerning the designation of gatekeepers. More specifically, it establishes the conditions under which providers of core platform services should be designated as gatekeepers either based on the quantitative criteria (through a presumption subject to counter-demonstration) or following a case-by-case assessment during a market investigation (Article 3). Furthermore, it also establishes conditions under which a designation of a gatekeeper may be reconsidered and an obligation to regularly review such a designation (Article 4). Chapter III sets out the practices of gatekeepers that limit contestability and that are unfair. In particular, it lays down self-executing obligations (Article 5) and obligations that are susceptible to specification (Article 6) that the designated gatekeepers should comply with in respect of each of their core platform services listed in the relevant designation decision. In addition, it establishes a framework for a possible dialogue between the designated gatekeeper and the Commission in relation to measures that the gatekeeper implements or intends to implement in order to comply with the obligations set out in Article 6 (Article 7). It also lays down conditions under which the obligations for an individual core platform service may be suspended in exceptional circumstances (Article 8) or an exemption can be granted on grounds of public interest (Article 9). Additional provisions in this Chapter establish a mechanism for updating the list of obligations (Article 10); a clarification that the obligations laid down in the Regulation apply regardless of whether the relevant practice of the designated gatekeeper is of a contractual, commercial, technical or any other nature (Article 11); an obligation to notify any intended concentration within the meaning of the EU Merger Regulation (Article 12); and an obligation on the designated gatekeeper to submit any techniques for profiling of consumers that the gatekeeper applies to or across its core platform services to an independent audit (Article 13). Chapter IV provides rules for carrying out market investigations, notably procedural requirements for the opening of a market investigation (Article 14) and rules for carrying out different types of market investigations: (i) designation of a gatekeeper (Article 15), (ii) investigation of systematic non-compliance (Article 16) and (iii) investigation of new core platform services and new practices (Article 17). Chapter V contains the provisions concerning the implementation and enforcement of this Regulation. It provides for procedural requirements for the opening of proceedings (Article 18). It then establishes rules in relation to different tools that can be used in the context of the market investigations or procedures under the Regulation. These include the ability of the Commission to request information (Article 19), conduct interviews and take statements (Article 20) and on-site inspections (Article 21), adopt interim measures (Article 22) and make voluntary measures binding on the gatekeepers (Article 23), as well as monitor their compliance with the Regulation (Article 24). In case of non-compliance, the Commission can issue non-compliance decisions (Article 25), as well as impose fines (Article 26) and periodic penalty payments (Article 27) for breaches of the Regulation by gatekeepers, as well as for the supply of incorrect, incomplete or misleading information in the context of the investigation. The Regulation sets also a limitation period for the imposition of penalties and for their enforcement (Articles 28 and 29). Several provisions in this Chapter set the procedural guarantees before the Commission, in particular the right to be heard and of access to the file (Article 30) and the protection of professional secrecy (Article 31). It also provides for the consultation of the Digital Markets Advisory Committee set up by this Regulation before adopting identified individual decisions addressed to gatekeepers (Article 32). Finally, the Regulation provides for a possibility for three or more Member States to request the Commission to open a market investigation pursuant to Article 15 (Article 33). Chapter VI contains further general provisions, such as an obligation to publish an identified set of individual decisions adopted under the Regulation (Article 34), a clarification that the Court of Justice of the European Union shall have unlimited jurisdiction in respect of fines and penalty payments (Article 35), and the possibility to adopt implementing (Article 36) and delegated (Article 37) acts. Finally, the remaining provisions in this Chapter are the review clause (Article 38) and the specification of the entry into force and dates of application of the Regulation (Article 39). 2020/0374 (COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on contestable and fair markets in the digital sector (Digital Markets Act)

(Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Having regard to the opinion of the European Economic and Social Committee, Having regard to the opinion of the Committee of the Regions, Having regard to the opinion of the European Data Protection Supervisor, Acting in accordance with the ordinary legislative procedure, Whereas: (1)Digital services in general and online platforms in particular play an increasingly important role in the economy, in particular in the internal market, by providing new business opportunities in the Union and facilitating cross-border trading. (2)Core platform services, at the same time, feature a number of characteristics that can be exploited by their providers. These characteristics of core platform services include among others extreme scale economies, which often result from nearly zero marginal costs to add business users or end users. Other characteristics of core platform services are very strong network effects, an ability to connect many business users with many end users through the multi-sidedness of these services, a significant degree of dependence of both business users and end users, lock-in effects, a lack of multi-homing for the same purpose by end users, vertical integration, and data driven-advantages. All these characteristics combined with unfair conduct by providers of these services can have the effect of substantially undermining the contestability of the core platform services, as well as impacting the fairness of the commercial relationship between providers of such services and their business users and end users, leading to rapid and potentially far-reaching decreases in business users’ and end users’ choice in practice, and therefore can confer to the provider of those services the position of a so-called gatekeeper. (3)A small number of large providers of core platform services have emerged with considerable economic power. Typically, they feature an ability to connect many business users with many end users through their services which, in turn, allows them to leverage their advantages, such as their access to large amounts of data, from one area of their activity to new ones. Some of these providers exercise control over whole platform ecosystems in the digital economy and are structurally extremely difficult to challenge or contest by existing or new market operators, irrespective of how innovative and efficient these may be. Contestability is particularly reduced due to the existence of very high barriers to entry or exit, including high investment costs, which cannot, or not easily, be recuperated in case of exit, and absence of (or reduced access to) some key inputs in the digital economy, such as data. As a result, the likelihood increases that the underlying markets do not function well – or will soon fail to function well. (4)The combination of those features of gatekeepers is likely to lead in many cases to serious imbalances in bargaining power and, consequently, to unfair practices and conditions for business users as well as end users of core platform services provided by gatekeepers, to the detriment of prices, quality, choice and innovation therein. (5)It follows that the market processes are often incapable of ensuring fair economic outcomes with regard to core platform services. Whereas Articles 101 and 102 TFEU remain applicable to the conduct of gatekeepers, their scope is limited to certain instances of market power (e.g. dominance on specific markets) and of anti-competitive behaviour, while enforcement occurs ex post and requires an extensive investigation of often very complex facts on a case by case basis. Moreover, existing Union law does not address, or does not address effectively, the identified challenges to the well-functioning of the internal market posed by the conduct of gatekeepers, which are not necessarily dominant in competition-law terms. (6)Gatekeepers have a significant impact on the internal market, providing gateways for a large number of business users, to reach end users, everywhere in the Union and on different markets. The adverse impact of unfair practices on the internal market and particularly weak contestability of core platform services, including their negative societal and economic implications, have led national legislators and sectoral regulators to act. A number of national regulatory solutions have already been adopted or proposed to address unfair practices and the contestability of digital services or at least with regard to some of them. This has created a risk of divergent regulatory solutions and thereby fragmentation of the internal market, thus raising the risk of increased compliance costs due to different sets of national regulatory requirements. (7)Therefore, business users and end-users of core platform services provided by gatekeepers should be afforded appropriate regulatory safeguards throughout the Union against the unfair behaviour of gatekeepers in order to facilitate cross-border business within the Union and thereby improve the proper functioning of the internal market and to address existing or likely emerging fragmentation in the specific areas covered by this Regulation. Moreover, while gatekeepers tend to adopt global or at least pan-European business models and algorithmic structures, they can adopt, and in some cases have adopted, different business conditions and practices in different Member States, which is liable to create disparities between the competitive conditions for the users of core platform services provided by gatekeepers, to the detriment of integration within the internal market. (8)By approximating diverging national laws, obstacles to the freedom to provide and receive services, including retail services, within the internal market should be eliminated. A targeted set of harmonised mandatory rules should therefore be established at Union level to ensure contestable and fair digital markets featuring the presence of gatekeepers within the internal market. (9)A fragmentation of the internal market can only be effectively averted if Member States are prevented from applying national rules which are specific to the types of undertakings and services covered by this Regulation. At the same time, since this Regulation aims at complementing the enforcement of competition law, it should be specified that this Regulation is without prejudice to Articles 101 and 102 TFEU, to the corresponding national competition rules and to other national competition rules regarding unilateral behaviour that are based on an individualised assessment of market positions and behaviour, including its likely effects and the precise scope of the prohibited behaviour, and which provide for the possibility of undertakings to make efficiency and objective justification arguments for the behaviour in question. However, the application of the latter rules should not affect the obligations imposed on gatekeepers under this Regulation and their uniform and effective application in the internal market. (10)Articles 101 and 102 TFEU and the corresponding national competition rules concerning anticompetitive multilateral and unilateral conduct as well as merger control have as their objective the protection of undistorted competition on the market. This Regulation pursues an objective that is complementary to, but different from that of protecting undistorted competition on any given market, as defined in competition-law terms, which is to ensure that markets where gatekeepers are present are and remain contestable and fair, independently from the actual, likely or presumed effects of the conduct of a given gatekeeper covered by this Regulation on competition on a given market. This Regulation therefore aims at protecting a different legal interest from those rules and should be without prejudice to their application.

(11)This Regulation should also complement, without prejudice to their application, the rules resulting from other acts of Union law regulating certain aspects of the provision of services covered by this Regulation, in particular Regulation (EU) 2019/1150 of the European Parliament and of the Council, Regulation (EU) xx/xx/EU [DSA] of the European Parliament and of the Council, Regulation (EU) 2016/679 of the European Parliament and of the Council, Directive (EU) 2019/790 of the European Parliament and of the Council, Directive (EU) 2015/2366 of the European Parliament and of the Council, and Directive (EU) 2010/13 of the European Parliament and of the Council, as well as national rules aimed at enforcing or, as the case may be, implementing that Union legislation. (12)Weak contestability and unfair practices in the digital sector are more frequent and pronounced for certain digital services than for others. This is the case in particular for widespread and commonly used digital services that mostly directly intermediate between business users and end users and where features such as extreme scale economies, very strong network effects, an ability to connect many business users with many end users through the multi-sidedness of these services, lock-in effects, a lack of multi-homing or vertical integration are the most prevalent. Often, there is only one or very few large providers of those digital services. These providers of core platform services have emerged most frequently as gatekeepers for business users and end users with far-reaching impacts, gaining the ability to easily set commercial conditions and terms in a unilateral and detrimental manner for their business users and end users. Accordingly, it is necessary to focus only on those digital services that are most broadly used by business users and end users and where, based on current market conditions, concerns about weak contestability and unfair practices by gatekeepers are more apparent and pressing from an internal market perspective. (13)In particular, online intermediation services, online search engines, operating systems, online social networking, video sharing platform services, number-independent interpersonal communication services, cloud computing services and online advertising services all have the capacity to affect a large number of end users and businesses alike, which entails a risk of unfair business practices. They therefore should be included in the definition of core platform services and fall into the scope of this Regulation. Online intermediation services may also be active in the field of financial services, and they may intermediate or be used to provide such services as listed non-exhaustively in Annex II to Directive (EU) 2015/1535 of the European Parliament and of the Council. In certain circumstances, the notion of end users should encompass users that are traditionally considered business users, but in a given situation do not use the core platform services to provide goods or services to other end users, such as for example businesses relying on cloud computing services for their own purposes. (14)A number of other ancillary services, such as identification or payment services and technical services which support the provision of payment services, may be provided by gatekeepers together with their core platform services. As gatekeepers frequently provide the portfolio of their services as part of an integrated ecosystem to which third-party providers of such ancillary services do not have access, at least not subject to equal conditions, and can link the access to the core platform service to take-up of one or more ancillary services, the gatekeepers are likely to have an increased ability and incentive to leverage their gatekeeper power from their core platform services to these ancillary services, to the detriment of choice and contestability of these services. (15)The fact that a digital service qualifies as a core platform service in light of its widespread and common use and its importance for connecting business users and end users does not as such give rise to sufficiently serious concerns of contestability and unfair practices. It is only when a core platform service constitutes an important gateway and is operated by a provider with a significant impact in the internal market and an entrenched and durable position, or by a provider that will foreseeably have such a position in the near future, that such concerns arise. Accordingly, the targeted set of harmonised rules laid down in this Regulation should apply only to undertakings designated on the basis of these three objective criteria, and they should only apply to those of their core platform services that individually constitute an important gateway for business users to reach end users. (16)In order to ensure the effective application of this Regulation to providers of core platform services which are most likely to satisfy these objective requirements, and where unfair conduct weakening contestability is most prevalent and impactful, the Commission should be able to directly designate as gatekeepers those providers of core platform services which meet certain quantitative thresholds. Such undertakings should in any event be subject to a fast designation process which should start upon the entry into force of this Regulation. (17)A very significant turnover in the Union and the provision of a core platform service in at least three Member States constitute compelling indications that the provider of a core platform service has a significant impact on the internal market. This is equally true where a provider of a core platform service in at least three Member States has a very significant market capitalisation or equivalent fair market value. Therefore, a provider of a core platform service should be presumed to have a significant impact on the internal market where it provides a core platform service in at least three Member States and where either its group turnover realised in the EEA is equal to or exceeds a specific, high threshold or the market capitalisation of the group is equal to or exceeds a certain high absolute value. For providers of core platform services that belong to undertakings that are not publicly listed, the equivalent fair market value above a certain high absolute value should be referred to. The Commission should use its power to adopt delegated acts to develop an objective methodology to calculate that value. A high EEA group turnover in conjunction with the threshold of users in the Union of core platform services reflects a relatively strong ability to monetise these users. A high market capitalisation relative to the same threshold number of users in the Union reflects a relatively significant potential to monetise these users in the near future. This monetisation potential in turn reflects in principle the gateway position of the undertakings concerned. Both indicators are in addition reflective of their financial capacity, including their ability to leverage their access to financial markets to reinforce their position. This may for example happen where this superior access is used to acquire other undertakings, which ability has in turn been shown to have potential negative effects on innovation. Market capitalisation can also be reflective of the expected future position and effect on the internal market of the providers concerned, notwithstanding a potentially relatively low current turnover. The market capitalisation value can be based on a level that reflects the average market capitalisation of the largest publicly listed undertakings in the Union over an appropriate period. (18)A sustained market capitalisation of the provider of core platform services at or above the threshold level over three or more years should be considered as strengthening the presumption that the provider of core platform services has a significant impact on the internal market. (19)There may be a number of factors concerning market capitalisation that would require an in-depth assessment in determining whether a provider of core platform services should be deemed to have a significant impact on the internal market. This may be the case where the market capitalisation of the provider of core platform services in preceding financial years was significantly lower than the average of the equity market, the volatility of its market capitalisation over the observed period was disproportionate to overall equity market volatility or its market capitalisation trajectory relative to market trends was inconsistent with a rapid and unidirectional growth. (20)A very high number of business users that depend on a core platform service to reach a very high number of monthly active end users allow the provider of that service to influence the operations of a substantial part of business users to its advantage and indicate in principle that the provider serves as an important gateway. The respective relevant levels for those numbers should be set representing a substantive percentage of the entire population of the Union when it comes to end users and of the entire population of businesses using platforms to determine the threshold for business users. (21)An entrenched and durable position in its operations or the foreseeability of achieving such a position future occurs notably where the contestability of the position of the provider of the core platform service is limited. This is likely to be the case where that provider has provided a core platform service in at least three Member States to a very high number of business users and end users during at least three years. (22)Such thresholds can be impacted by market and technical developments. The Commission should therefore be empowered to adopt delegated acts to specify the methodology for determining whether the quantitative thresholds are met, and to regularly adjust it to market and technological developments where necessary. This is particularly relevant in relation to the threshold referring to market capitalisation, which should be indexed in appropriate intervals. (23)Providers of core platform services which meet the quantitative thresholds but are able to present sufficiently substantiated arguments to demonstrate that, in the circumstances in which the relevant core platform service operates, they do not fulfil the objective requirements for a gatekeeper, should not be designated directly, but only subject to a further investigation. The burden of adducing evidence that the presumption deriving from the fulfilment of quantitative thresholds should not apply to a specific provider should be borne by that provider In its assessment, the Commission should take into account only the elements which directly relate to the requirements for constituting a gatekeeper, namely whether it is an important gateway which is operated by a provider with a significant impact in the internal market with an entrenched and durable position, either actual or foreseeable. Any justification on economic grounds seeking to demonstrate efficiencies deriving from a specific type of behaviour by the provider of core platform services should be discarded, as it is not relevant to the designation as a gatekeeper. The Commission should be able to take a decision by relying on the quantitative thresholds where the provider significantly obstructs the investigation by failing to comply with the investigative measures taken by the Commission. (24)Provision should also be made for the assessment of the gatekeeper role of providers of core platform services which do not satisfy all of the quantitative thresholds, in light of the overall objective requirements that they have a significant impact on the internal market, act as an important gateway for business users to reach end users and benefit from a durable and entrenched position in their operations or it is foreseeable that it will do so in the near future. (25)Such an assessment can only be done in light of a market investigation, while taking into account the quantitative thresholds. In its assessment the Commission should pursue the objectives of preserving and fostering the level of innovation, the quality of digital products and services, the degree to which prices are fair and competitive, and the degree to which quality or choice for business users and for end users is or remains high. Elements that are specific to the providers of core platform services concerned, such as extreme scale economies, very strong network effects, an ability to connect many business users with many end users through the multi-sidedness of these services, lock-in effects, a lack of multi-homing or vertical integration, can be taken into account. In addition, a very high market capitalisation, a very high ratio of equity value over profit or a very high turnover derived from end users of a single core platform service can point to the tipping of the market or leveraging potential of such providers. Together with market capitalisation, high growth rates, or decelerating growth rates read together with profitability growth, are examples of dynamic parameters that are particularly relevant to identifying such providers of core platform services that are foreseen to become entrenched. The Commission should be able to take a decision by drawing adverse inferences from facts available where the provider significantly obstructs the investigation by failing to comply with the investigative measures taken by the Commission. (26)A particular subset of rules should apply to those providers of core platform services that are foreseen to enjoy an entrenched and durable position in the near future. The same specific features of core platform services make them prone to tipping: once a service provider has obtained a certain advantage over rivals or potential challengers in terms of scale or intermediation power, its position may become unassailable and the situation may evolve to the point that it is likely to become durable and entrenched in the near future. Undertakings can try to induce this tipping and emerge as gatekeeper by using some of the unfair conditions and practices regulated in this Regulation. In such a situation, it appears appropriate to intervene before the market tips irreversibly. (27)However, such an early intervention should be limited to imposing only those obligations that are necessary and appropriate to ensure that the services in question remain contestable and allow to avoid the qualified risk of unfair conditions and practices. Obligations that prevent the provider of core platform services concerned from achieving an entrenched and durable position in its operations, such as those preventing unfair leveraging, and those that facilitate switching and multi-homing are more directly geared towards this purpose. To ensure proportionality, the Commission should moreover apply from that subset of obligations only those that are necessary and proportionate to achieve the objectives of this Regulation and should regularly review whether such obligations should be maintained, suppressed or adapted. (28)This should allow the Commission to intervene in time and effectively, while fully respecting the proportionality of the considered measures. It should also reassure actual or potential market participants about the fairness and contestability of the services concerned. (29)Designated gatekeepers should comply with the obligations laid down in this Regulation in respect of each of the core platform services listed in the relevant designation decision. The mandatory rules should apply taking into account the conglomerate position of gatekeepers, where applicable. Furthermore, implementing measures that the Commission may by decision impose on the gatekeeper following a regulatory dialogue should be designed in an effective manner, having regard to the features of core platform services as well as possible circumvention risks and in compliance with the principle of proportionality and the fundamental rights of the undertakings concerned as well as those of third parties. (30)The very rapidly changing and complex technological nature of core platform services requires a regular review of the status of gatekeepers, including those that are foreseen to enjoy a durable and entrenched position in their operations in the near future. To provide all of the market participants, including the gatekeepers, with the required certainty as to the applicable legal obligations, a time limit for such regular reviews is necessary. It is also important to conduct such reviews on a regular basis and at least every two years.

(31)To ensure the effectiveness of the review of gatekeeper status as well as the possibility to adjust the list of core platform services provided by a gatekeeper, the gatekeepers should inform the Commission of all of their intended and concluded acquisitions of other providers of core platform services or any other services provided within the digital sector. Such information should not only serve the review process mentioned above, regarding the status of individual gatekeepers, but will also provide information that is crucial to monitoring broader contestability trends in the digital sector and can therefore be a useful factor for consideration in the context of the market investigations foreseen by this Regulation. (32)To safeguard the fairness and contestability of core platform services provided by gatekeepers, it is necessary to provide in a clear and unambiguous manner for a set of harmonised obligations with regard to those services. Such rules are needed to address the risk of harmful effects of unfair practices imposed by gatekeepers, to the benefit of the business environment in the services concerned, to the benefit of users and ultimately to the benefit of society as a whole. Given the fast-moving and dynamic nature of digital markets, and the substantial economic power of gatekeepers, it is important that these obligations are effectively applied without being circumvented. To that end, the obligations in question should apply to any practices by a gatekeeper, irrespective of its form and irrespective of whether it is of a contractual, commercial, technical or any other nature, insofar as a practice corresponds to the type of practice that is the subject of one of the obligations of this Regulation. (33)The obligations laid down in this Regulation are limited to what is necessary and justified to address the unfairness of the identified practices by gatekeepers and to ensure contestability in relation to core platform services provided by gatekeepers. Therefore, the obligations should correspond to those practices that are considered unfair by taking into account the features of the digital sector and where experience gained, for example in the enforcement of the EU competition rules, shows that they have a particularly negative direct impact on the business users and end users. In addition, it is necessary to provide for the possibility of a regulatory dialogue with gatekeepers to tailor those obligations that are likely to require specific implementing measures in order to ensure their effectiveness and proportionality. The obligations should only be updated after a thorough investigation on the nature and impact of specific practices that may be newly identified, following an in-depth investigation, as unfair or limiting contestability in the same manner as the unfair practices laid down in this Regulation while potentially escaping the scope of the current set of obligations. (34)The combination of these different mechanisms for imposing and adapting obligations should ensure that the obligations do not extend beyond observed unfair practices, while at the same time ensuring that new or evolving practices can be the subject of intervention where necessary and justified. (35)The obligations laid down in this Regulation are necessary to address identified public policy concerns, there being no alternative and less restrictive measures that would effectively achieve the same result, having regard to need to safeguard public order, protect privacy and fight fraudulent and deceptive commercial practices. (36)The conduct of combining end user data from different sources or signing in users to different services of gatekeepers gives them potential advantages in terms of accumulation of data, thereby raising barriers to entry. To ensure that gatekeepers do not unfairly undermine the contestability of core platform services, they should enable their end users to freely choose to opt-in to such business practices by offering a less personalised alternative. The possibility should cover all possible sources of personal data, including own services of the gatekeeper as well as third party websites, and should be proactively presented to the end user in an explicit, clear and straightforward manner. (37)Because of their position, gatekeepers might in certain cases restrict the ability of business users of their online intermediation services to offer their goods or services to end users under more favourable conditions, including price, through other online intermediation services. Such restrictions have a significant deterrent effect on the business users of gatekeepers in terms of their use of alternative online intermediation services, limiting inter-platform contestability, which in turn limits choice of alternative online intermediation channels for end users. To ensure that business users of online intermediation services of gatekeepers can freely choose alternative online intermediation services and differentiate the conditions under which they offer their products or services to their end users, it should not be accepted that gatekeepers limit business users from choosing to differentiate commercial conditions, including price. Such a restriction should apply to any measure with equivalent effect, such as for example increased commission rates or de-listing of the offers of business users. (38)To prevent further reinforcing their dependence on the core platform services of gatekeepers, the business users of these gatekeepers should be free in promoting and choosing the distribution channel they consider most appropriate to interact with any end users that these business users have already acquired through core platform services provided by the gatekeeper. Conversely, end users should also be free to choose offers of such business users and to enter into contracts with them either through core platform services of the gatekeeper, if applicable, or from a direct distribution channel of the business user or another indirect distribution channel such business user may use. This should apply to the promotion of offers and conclusion of contracts between business users and end users. Moreover, the ability of end users to freely acquire content, subscriptions, features or other items outside the core platform services of the gatekeeper should not be undermined or restricted. In particular, it should be avoided that gatekeepers restrict end users from access to and use of such services via a software application running on their core platform service. For example, subscribers to online content purchased outside a software application download or purchased from a software application store should not be prevented from accessing such online content on a software application on the gatekeeper’s core platform service simply because it was purchased outside such software application or software application store. (39)To safeguard a fair commercial environment and protect the contestability of the digital sector it is important to safeguard the right of business users to raise concerns about unfair behaviour by gatekeepers with any relevant administrative or other public authorities. For example, business users may want to complain about different types of unfair practices, such as discriminatory access conditions, unjustified closing of business user accounts or unclear grounds for product de-listings. Any practice that would in any way inhibit such a possibility of raising concerns or seeking available redress, for instance by means of confidentiality clauses in agreements or other written terms, should therefore be prohibited. This should be without prejudice to the right of business users and gatekeepers to lay down in their agreements the terms of use including the use of lawful complaints-handling mechanisms, including any use of alternative dispute resolution mechanisms or of the jurisdiction of specific courts in compliance with respective Union and national law This should therefore also be without prejudice to the role gatekeepers play in the fight against illegal content online. (40)Identification services are crucial for business users to conduct their business, as these can allow them not only to optimise services, to the extent allowed under Regulation (EU) 2016/679 and Directive 2002/58/EC of the European Parliament and of the Council, but also to inject trust in online transactions, in compliance with Union or national law. Gatekeepers should therefore not use their position as provider of core platform services to require their dependent business users to include any identification services provided by the gatekeeper itself as part of the provision of services or products by these business users to their end users, where other identification services are available to such business users. (41)Gatekeepers should not restrict the free choice of end users by technically preventing switching between or subscription to different software applications and services. Gatekeepers should therefore ensure a free choice irrespective of whether they are the manufacturer of any hardware by means of which such software applications or services are accessed and should not raise artificial technical barriers so as to make switching impossible or ineffective. The mere offering of a given product or service to end users, including by means of pre-installation, as well the improvement of end user offering, such as better prices or increased quality, would not in itself constitute a barrier to switching. (42)The conditions under which gatekeepers provide online advertising services to business users including both advertisers and publishers are often non-transparent and opaque. This opacity is partly linked to the practices of a few platforms, but is also due to the sheer complexity of modern day programmatic advertising. The sector is considered to have become more non-transparent after the introduction of new privacy legislation, and is expected to become even more opaque with the announced removal of third-party cookies. This often leads to a lack of information and knowledge for advertisers and publishers about the conditions of the advertising services they purchased and undermines their ability to switch to alternative providers of online advertising services. Furthermore, the costs of online advertising are likely to be higher than they would be in a fairer, more transparent and contestable platform environment. These higher costs are likely to be reflected in the prices that end users pay for many daily products and services relying on the use of online advertising. Transparency obligations should therefore require gatekeepers to provide advertisers and publishers to whom they supply online advertising services, when requested and to the extent possible, with information that allows both sides to understand the price paid for each of the different advertising services provided as part of the relevant advertising value chain. (43)A gatekeeper may in certain circumstances have a dual role as a provider of core platform services whereby it provides a core platform service to its business users, while also competing with those same business users in the provision of the same or similar services or products to the same end users. In these circumstances, a gatekeeper may take advantage of its dual role to use data, generated from transactions by its business users on the core platform, for the purpose of its own services that offer similar services to that of its business users. This may be the case, for instance, where a gatekeeper provides an online marketplace or app store to business users, and at the same time offer services as an online retailer or provider of application software against those business users. To prevent gatekeepers from unfairly benefitting from their dual role, it should be ensured that they refrain from using any aggregated or non-aggregated data, which may include anonymised and personal data that is not publicly available to offer similar services to those of their business users. This obligation should apply to the gatekeeper as a whole, including but not limited to its business unit that competes with the business users of a core platform service. (44)Business users may also purchase advertising services from a provider of core platform services for the purpose of providing goods and services to end users. In this case, it may occur that the data are not generated on the core platform service, but are provided to the core platform service by the business user or are generated based on its operations through the core platform service concerned. In certain instances, that core platform service providing advertising may have a dual role, as intermediary and as provider of advertising services. Accordingly, the obligation prohibiting a dual role gatekeeper from using data of business users should apply also with respect to the data that a core platform service has received from businesses for the purpose of providing advertising services related to that core platform service. (45)In relation to cloud computing services, this obligation should extend to data provided or generated by business users of the gatekeeper in the context of their use of the cloud computing service of the gatekeeper, or through its software application store that allows end users of cloud computing services access to software applications. This obligation should not affect the right of gatekeepers to use aggregated data for providing ancillary data analytics services, subject to compliance with Regulation 2016/679 and Directive 2002/58/EC as well as with the relevant obligations in this Regulation concerning ancillary services. (46)A gatekeeper may use different means to favour its own services or products on its core platform service, to the detriment of the same or similar services that end users could obtain through third parties. This may for instance be the case where certain software applications or services are pre-installed by a gatekeeper. To enable end user choice, gatekeepers should not prevent end users from un-installing any pre-installed software applications on its core platform service and thereby favour their own software applications. (47)The rules that the gatekeepers set for the distribution of software applications may in certain circumstances restrict the ability of end users to install and effectively use third party software applications or software application stores on operating systems or hardware of the relevant gatekeeper and restrict the ability of end users to access these software applications or software application stores outside the core platform services of that gatekeeper. Such restrictions may limit the ability of developers of software applications to use alternative distribution channels and the ability of end users to choose between different software applications from different distribution channels and should be prohibited as unfair and liable to weaken the contestability of core platform services. In order to ensure that third party software applications or software application stores do not endanger the integrity of the hardware or operating system provided by the gatekeeper the gatekeeper concerned may implement proportionate technical or contractual measures to achieve that goal if the gatekeeper demonstrates that such measures are necessary and justified and that there are no less restrictive means to safeguard the integrity of the hardware or operating system. (48)Gatekeepers are often vertically integrated and offer certain products or services to end users through their own core platform services, or through a business user over which they exercise control which frequently leads to conflicts of interest. This can include the situation whereby a gatekeeper offers its own online intermediation services through an online search engine. When offering those products or services on the core platform service, gatekeepers can reserve a better position to their own offering, in terms of ranking, as opposed to the products of third parties also operating on that core platform service. This can occur for instance with products or services, including other core platform services, which are ranked in the results communicated by online search engines, or which are partly or entirely embedded in online search engines results, groups of results specialised in a certain topic, displayed along with the results of an online search engine, which are considered or used by certain end users as a service distinct or additional to the online search engine. Other instances are those of software applications which are distributed through software application stores, or products or services that are given prominence and display in the newsfeed of a social network, or products or services ranked in search results or displayed on an online marketplace. In those circumstances, the gatekeeper is in a dual-role position as intermediary for third party providers and as direct provider of products or services of the gatekeeper. Consequently, these gatekeepers have the ability to undermine directly the contestability for those products or services on these core platform services, to the detriment of business users which are not controlled by the gatekeeper. (49)In such situations, the gatekeeper should not engage in any form of differentiated or preferential treatment in ranking on the core platform service, whether through legal, commercial or technical means, in favour of products or services it offers itself or through a business user which it controls. To ensure that this obligation is effective, it should also be ensured that the conditions that apply to such ranking are also generally fair. Ranking should in this context cover all forms of relative prominence, including display, rating, linking or voice results. To ensure that this obligation is effective and cannot be circumvented it should also apply to any measure that may have an equivalent effect to the differentiated or preferential treatment in ranking. The guidelines adopted pursuant to Article 5 of Regulation (EU) 2019/1150 should also facilitate the implementation and enforcement of this obligation. (50)Gatekeepers should not restrict or prevent the free choice of end users by technically preventing switching between or subscription to different software applications and services. This would allow more providers to offer their services, thereby ultimately providing greater choice to the end user. Gatekeepers should ensure a free choice irrespective of whether they are the manufacturer of any hardware by means of which such software applications or services are accessed and shall not raise artificial technical barriers so as to make switching impossible or ineffective. The mere offering of a given product or service to consumers, including by means of pre-installation, as well as the improvement of the offering to end users, such as price reductions or increased quality, should not be construed as constituting a prohibited barrier to switching.

(51)Gatekeepers can hamper the ability of end users to access online content and services including software applications. Therefore, rules should be established to ensure that the rights of end users to access an open internet are not compromised by the conduct of gatekeepers. Gatekeepers can also technically limit the ability of end users to effectively switch between different Internet access service providers, in particular through their control over operating systems or hardware. This distorts the level playing field for Internet access services and ultimately harms end users. It should therefore be ensured that gatekeepers do not unduly restrict end users in choosing their Internet access service provider. (52)Gatekeepers may also have a dual role as developers of operating systems and device manufacturers, including any technical functionality that such a device may have. For example, a gatekeeper that is a manufacturer of a device may restrict access to some of the functionalities in this device, such as near-field-communication technology and the software used to operate that technology, which may be required for the effective provision of an ancillary service by the gatekeeper as well as by any potential third party provider of such an ancillary service. Such access may equally be required by software applications related to the relevant ancillary services in order to effectively provide similar functionalities as those offered by gatekeepers. If such a dual role is used in a manner that prevents alternative providers of ancillary services or of software applications to have access under equal conditions to the same operating system, hardware or software features that are available or used in the provision by the gatekeeper of any ancillary services, this could significantly undermine innovation by providers of such ancillary services as well as choice for end users of such ancillary services. The gatekeepers should therefore be obliged to ensure access under equal conditions to, and interoperability with, the same operating system, hardware or software features that are available or used in the provision of any ancillary services by the gatekeeper. (53)The conditions under which gatekeepers provide online advertising services to business users including both advertisers and publishers are often non-transparent and opaque. This often leads to a lack of information for advertisers and publishers about the effect of a given ad. To further enhance fairness, transparency and contestability of online advertising services designated under this Regulation as well as those that are fully integrated with other core platform services of the same provider, the designated gatekeepers should therefore provide advertisers and publishers, when requested, with free of charge access to the performance measuring tools of the gatekeeper and the information necessary for advertisers, advertising agencies acting on behalf of a company placing advertising, as well as for publishers to carry out their own independent verification of the provision of the relevant online advertising services. (54)Gatekeepers benefit from access to vast amounts of data that they collect while providing the core platform services as well as other digital services. To ensure that gatekeepers do not undermine the contestability of core platform services as well as the innovation potential of the dynamic digital sector by restricting the ability of business users to effectively port their data, business users and end users should be granted effective and immediate access to the data they provided or generated in the context of their use of the relevant core platform services of the gatekeeper, in a structured, commonly used and machine-readable format. This should apply also to any other data at different levels of aggregation that may be necessary to effectively enable such portability. It should also be ensured that business users and end users can port that data in real time effectively, such as for example through high quality application programming interfaces. Facilitating switching or multi-homing should lead, in turn, to an increased choice for business users and end users and an incentive for gatekeepers and business users to innovate. (55)Business users that use large core platform services provided by gatekeepers and end users of such business users provide and generate a vast amount of data, including data inferred from such use. In order to ensure that business users have access to the relevant data thus generated, the gatekeeper should, upon their request, allow unhindered access, free of charge, to such data. Such access should also be given to third parties contracted by the business user, who are acting as processors of this data for the business user. Data provided or generated by the same business users and the same end users of these business users in the context of other services provided by the same gatekeeper may be concerned where this is inextricably linked to the relevant request. To this end, a gatekeeper should not use any contractual or other restrictions to prevent business users from accessing relevant data and should enable business users to obtain consent of their end users for such data access and retrieval, where such consent is required under Regulation (EU) 2016/679 and Directive 2002/58/EC. Gatekeepers should also facilitate access to these data in real time by means of appropriate technical measures, such as for example putting in place high quality application programming interfaces. (56)The value of online search engines to their respective business users and end users increases as the total number of such users increases. Providers of online search engines collect and store aggregated datasets containing information about what users searched for, and how they interacted with, the results that they were served. Providers of online search engine services collect these data from searches undertaken on their own online search engine service and, where applicable, searches undertaken on the platforms of their downstream commercial partners. Access by gatekeepers to such ranking, query, click and view data constitutes an important barrier to entry and expansion, which undermines the contestability of online search engine services. Gatekeepers should therefore be obliged to provide access, on fair, reasonable and non-discriminatory terms, to these ranking, query, click and view data in relation to free and paid search generated by consumers on online search engine services to other providers of such services, so that these third-party providers can optimise their services and contest the relevant core platform services. Such access should also be given to third parties contracted by a search engine provider, who are acting as processors of this data for that search engine. When providing access to its search data, a gatekeeper should ensure the protection of the personal data of end users by appropriate means, without substantially degrading the quality or usefulness of the data. (57)In particular gatekeepers which provide access to software application stores serve as an important gateway for business users that seek to reach end users. In view of the imbalance in bargaining power between those gatekeepers and business users of their software application stores, those gatekeepers should not be allowed to impose general conditions, including pricing conditions, that would be unfair or lead to unjustified differentiation. Pricing or other general access conditions should be considered unfair if they lead to an imbalance of rights and obligations imposed on business users or confer an advantage on the gatekeeper which is disproportionate to the service provided by the gatekeeper to business users or lead to a disadvantage for business users in providing the same or similar services as the gatekeeper. The following benchmarks can serve as a yardstick to determine the fairness of general access conditions: prices charged or conditions imposed for the same or similar services by other providers of software application stores; prices charged or conditions imposed by the provider of the software application store for different related or similar services or to different types of end users; prices charged or conditions imposed by the provider of the software application store for the same service in different geographic regions; prices charged or conditions imposed by the provider of the software application store for the same service the gatekeeper offers to itself. This obligation should not establish an access right and it should be without prejudice to the ability of providers of software application stores to take the required responsibility in the fight against illegal and unwanted content as set out in Regulation [Digital Services Act]. (58)To ensure the effectiveness of the obligations laid down by this Regulation, while also making certain that these obligations are limited to what is necessary to ensure contestability and tackling the harmful effects of the unfair behaviour by gatekeepers, it is important to clearly define and circumscribe them so as to allow the gatekeeper to immediately comply with them, in full respect of Regulation (EU) 2016/679 and Directive 2002/58/EC, consumer protection, cyber security and product safety. The gatekeepers should ensure the compliance with this Regulation by design. The necessary measures should therefore be as much as possible and where relevant integrated into the technological design used by the gatekeepers. However, it may in certain cases be appropriate for the Commission, following a dialogue with the gatekeeper concerned, to further specify some of the measures that the gatekeeper concerned should adopt in order to effectively comply with those obligations that are susceptible of being further specified. This possibility of a regulatory dialogue should facilitate compliance by gatekeepers and expedite the correct implementation of the Regulation. (59)As an additional element to ensure proportionality, gatekeepers should be given an opportunity to request the suspension, to the extent necessary, of a specific obligation in exceptional circumstances that lie beyond the control of the gatekeeper, such as for example an unforeseen external shock that has temporarily eliminated a significant part of end user demand for the relevant core platform service, where compliance with a specific obligation is shown by the gatekeeper to endanger the economic viability of the Union operations of the gatekeeper concerned. (60)In exceptional circumstances justified on the limited grounds of public morality, public health or public security, the Commission should be able to decide that the obligation concerned does not apply to a specific core platform service. Affecting thes