Source: EURLEX
Language: en
Format: md

**Council of the**
**European Union**

**Interinstitutional File:**

**2020/0374(COD)**

**Brussels, 17 May 2021**
**(OR. en)**

**8807/21**

**CODEC 701**
**COMPET 359**
**IA 88**
**MI 350**
**RC 22**
**TELECOM 207**

**NOTE**

From: Permanent Representatives Committee

To: General Secretariat of the Council

No. Cion doc.: 14172/20 + ADD 1-4 - COM(2020) 842 final

Subject: Proposal for a Regulation of the European Parliament and of the Council
on contestable and fair markets in the digital sector (Digital Markets Act)

          - Progress report

**I.** **INTRODUCTION**

1. On 15 December 2020, the Commission submitted to the European Parliament and to the

Council a proposal for a Regulation of the European Parliament and of the Council on

contestable and fair markets in the digital sector (Digital Markets Act) **[1]** .

2. The Digital Markets Act, together with the Digital Services Act **[2]**, is proposed as an upgrade

and complementarity to the rules governing digital services in the European Union and part of

the Commission’s European Digital Strategy, _Shaping Europe’s Digital Future_ .

**1** Document 14172/20 + ADD 1
**2** Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital
Services (Digital Services Act) and amending Directive 2000/31/EC (Document 14124/20 + COR 1 + ADD 1.

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3. The aim of the proposal, based on Article 114 TFEU, is to ensure a contestable and fair digital

sector in general and core platform services in particular, with a view to promoting

innovation, high quality of digital products and services, fair and competitive prices, as well

as a high quality and choice for business and end users in the digital sector.

4. The European Data Protection Supervisor issued its opinion on 10 February 2021 **[3]** .

5. The European Economic and Social Committee issued its opinion on 27 April 2021 **[4]** .

6. In the European Parliament, a final decision concerning the responsible committee has just

been taken. The main responsible committee is the Committee on the Internal Market and

Consumer Protection (IMCO). The Rapporteur is Andreas Schwab (EPP, DE). The

committees on Economic Affairs (ECON) and Industry, Research and Energy (ITRE) have

been given associated status, while the LIBE, JURI, CULT and TRAN committees will

contribute to the legislative process with their opinions.

7. In the statement of 25 March 2021, the members of the European Council invited the co

legislators to work swiftly on the Digital Services Act and the Digital Markets Act, with a

view to strengthening the Single Market for digital services by creating a safer digital space

and a level playing field to foster innovation and competitiveness.

**II.** **WORK WITHIN THE COUNCIL**

8. On 16 December 2020, during the German Presidency, the Commission provided a general

overview of the proposal to the Working Party on Competition. By the end of May 2021,

under the Portuguese Presidency, the Working Party on Competition will have examined the

proposal at 15 meetings.

9. For the purpose of discussions in the Working Party on Competition, the Portuguese

Presidency has divided the proposal in nine building blocks (designation of gatekeepers,

gatekeepers’ obligations, implementation of obligations, future proofing, scope of Regulation

and role of Member States, Commission’s investigative and monitoring powers, compliance,

procedural guarantees, implementing and delegated acts).

**3** European Data Protection Supervisor - Opinion 02/21 of 10.02.2021
**4** INT/928 – EESC-2021-00127-00-00-AC-TRA

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10. The impact assessment accompanying this proposal was examined in detail at the meeting of

the Working Party of 14 January 2021, especially focusing on aspects for which delegations

requested further clarifications (notably on legal basis, gatekeeper designation, interplay

between the Digital Markets Act and other legislation, obligations and regulatory costs).

11. The Working Party on Competition has completed a first full examination of the proposal on

26 April 2021, so it seems appropriate to report the progress in the discussions to the

Permanent Representatives Committee (COREPER) with a view to inform the

Competitiveness Council (COMPET Council) on 27 May 2021.

**III.** **STATE OF PLAY AND MAIN ISSUES**

12. Even though Member States have reserved their positions pending the ongoing discussions,

the   Presidency has identified a general support among the Member States for the level of

ambition of the proposal, its overall objectives and the need for swift approval. In particular,

the Presidency has recognised broad support for (i) the need to find a fair balance between

speedy and flexible procedures, on one hand, and legal certainty of the measures, on the other;

(ii) the combination of quantitative and qualitative thresholds for designating gatekeepers and

(iii) the importance of effective investigative instruments, supported by effective sanctions.

13. Based on the discussions at Working Party level held so far, the Presidency identifies the

following main issues from a political and legal point of view, which will require further work

in the negotiations:

**a)** **Role of Member States in the enforcement of the DMA**

14. While Member States generally acknowledge that the Commission should have a central role

in the implementation and enforcement of the Digital Markets Act, a majority of Member

States called for further consideration of the role of Member States, including competent

national authorities, for example in the opening of market investigations, market monitoring

and in the decision-making procedure.

15. Several Member States have also identified the need to clarify the framework for cooperation

and information sharing between the Commission and Member States, in particular in the

context of the implementation of Article 1(7). This includes the envisaged role of the Digital

Markets Advisory Committee, as well as the involvement of national competition authorities.

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**b)** **Delegated acts**

16. According to the proposal, in specific cases (Articles 3(5) and 10) the Commission may issue

delegated acts under certain circumstances (Article 37). Some Member States expressed some

doubts about the scope of delegated acts envisaged in the proposal, for example to specify the

methodology concerning quantitative thresholds applicable for designating gatekeepers under

Article 3.

17. In addition, while recognizing the need for future proofing the rules applicable to gatekeepers

under the Digital Markets Act, a significant number of Member States also expressed

reservations regarding the use and scope of delegated acts for the update under Article 10 of

obligations laid down in Articles 5 and 6, including in light of the rules applicable to the

adoption of delegated acts.

**c)** **Scope, legal basis and interplay of DMA with other legislation**

18. The proposal provides a harmonised set of rules for gatekeepers at Union level with a view to

ensure fair and contestable markets in the digital sector, thereby contributing to the well

functioning of the internal marketing by avoiding fragmentation. The Commission explained

that the proposal is a complement to existing rules and, when appropriate, is without prejudice

to other legislation applicable to the provision of services covered in the proposal, at EU and

national level (Article 1).

19. Member States have generally acknowledged the need for harmonised rules, several Member

States having suggested a clarification of the relationship between the objectives of the

proposal and its legal basis.

20. Furthermore, in the interest of legal certainty and efficiency, several Member States have

called for more clarity regarding the coordination between the Digital Markets Act and other

EU and national rules, such as the competition rules, the General Data Protection Regulation **[5]**,

the Regulation on Platform to Business trading practices (“P2B Regulation”) **[6]** or legislation

related to the intellectual property rights.

**5** Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection
of natural persons with regard to to the processing of personal data and on the free movement of such data, and
repealing Directive 95/46/EC (OJ L 119, 4.5.2016, p.1-88)
**6** Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting

–
fairness and transparency for business users of online intermediation services (OJ L 186, 11.7.2019, p. 57 79)

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**d)** **Designation of gatekeepers, obligations and regulatory dialogue**

21. Member States generally support the key principles of the mechanism to designate

gatekeepers, in particular the combination of quantitative and qualitative criteria. Some

Member States have suggested amendments of some elements relating to the designation of

gatekeepers (Articles 3, 4 and 15). In addition to the questions concerning the use of delegated

acts under Article 3(5) mentioned above, a number of Member States have proposed changes

to the criteria defining the designation procedure, for example emphasising the need to take

into account conglomerate strategies as an element relevant in the assessment leading to the

designation of gatekeepers.

22. Several Member States have also raised issues relating to the deadlines applicable to the

market investigations concerning the gatekeeper designation.

23. While Member States showed strong support for clearly defined and enforceable obligations,

some of them also called for adjustments to the scope and conditions of some of the

obligations set in Articles 5 and 6, which constitute the core of the proposal. This refers in

particular to obligations concerning interoperability, data portability and access to data. Some

Member States also raised the need for more individualised approach with regard to the

imposition of the obligations, as they have to reflect various business models of gatekeepers.

In addition, several Member States asked for more clarity regarding the obligations applicable

to emerging gatekeepers.

24. The obligations set in Article 6 are subject to an optional dialogue framework (Article 7)

between the gatekeepers and the Commission to facilitate compliance with obligations when

implementing measures by the gatekeeper may require further specification. In this respect,

several Member States have called for a strengthening of their role through the Digital

Markets Advisory Committee. A few Member States have proposed a possibility of

gatekeepers to make use of efficiency and objective justifications for their conduct to better

take into account the impact of gatekeepers’ behaviour on consumers and the particular

situation of each gatekeeper. Other Member States were of the opinion that such a possibility

would weaken the DMA and make its enforcement more cumbersome, lengthier and less

effective. In addition, some Member States have also highlighted the need to clarify the

interplay between the regulatory dialogue framework and non-compliance proceedings.

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25. Several Member States have also raised issues with respect to the scope of the reasoned

requests for suspension of, and exemptions from, obligations foreseen in Articles 8 and 9.

26. Article 12 requires gatekeepers to inform the Commission of acquisitions of other providers

of digital services, in order to inform the review of gatekeeper status and the monitoring of

contestability trends. Several Member States have called for a more ambitious text in this

respect, which would improve the merger control system with respect to acquisitions by

gatekeepers. The Commission explained that such a goal, and in particular the need to address

the issue of “killer acquisitions” in the digital sector, is addressed by the change in the

Commission’s policy approach to Member State referrals under Article 22 of the EU Merger

Regulation. Several Member States suggested that the information gathered through this

obligation under Article 12 should feed the merger control procedures at EU and national

level, and proposed a corresponding clarification in Article 31, under which the information

shall be used only for the purposes of the Digital Markets Act.

**e) Other issues**

27. Other issues pointed out by the delegations for further discussion included, _inter alia_ :

   - Whether some obligations should factor in the gatekeepers’ ecosystems;

   - Duration of market investigations and the threshold for systematic non-compliance

remedies;

   - Scope and threshold for interim measures.

28. Significant progress has been achieved during the Portuguese Presidency, and delegations will

continue to analyse in-depth the content of the proposal. Therefore, taking into account the

complexity of the proposal, its impact on the single market and on contestable and fair

markets in the digital sector, as well as its interrelation with other instruments of Union and

national law, further work at technical level is required before the Council can take a political

decision, for which the present report is a contribution, sign posting the key issues. The

Portuguese Presidency is committed to closely work with the incoming Slovenian Presidency

in order to facilitate a future compromise.

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**IV.** **CONCLUSIONS**

29. The Council (Competitiveness) is invited to take note of the present progress report from the

Presidency.

___________________

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