Reverse DMA: The role of private enforcement

The Digital Markets Act ("DMA") is Europe’s new tool to ensure open, fair and competitive digital markets (see here). The European Commission ("Commission") has now identified a first round of so-called "gatekeepers" – providers of core platform services such as online search engines, app stores or messenger services – that have to comply with the Do’s and Don’ts stated in the DMA.

In this article, we look at the opportunities and challenges of using the DMA for your business – whether it is participating in an ecosystem, distributing your apps through alternative app stores, or claiming for interoperability. The DMA provides powerful tools for private action that should be read in conjunction with general antitrust rules.

Foul play – Third Party Rights under the DMA – Focus: Germany

The DMA itself states that any third party, be it business users or competitors, can inform their national competition authority about potential non-compliance with the DMA. While (informal) complaints are one way to use the DMA, such interaction with competition authorities have the downside of the respective authorities’ full discretion on whether or not to accept the complaint.

Thus, the DMA views national courts to play an important role in the private enforcement of the DMA. Germany – on the forefront – is the first Member State whose legislator has implemented such new private enforcement rights under the DMA in the revised Act against Restraints of Competition ("ARC"). Third parties now have the possibility to bring stand-alone actions (where the Commission has not yet found an infringement by the gatekeeper) or follow-on actions (where the Commission has already found an infringement under the DMA and the third party can rely on this finding). In more detail:

• Sections 33 (1), 33a ARC: Any violation of the obligations under Articles 5-7 DMA gives rise to claims for damages and injunctive relief. Interim measures for injunction can provide a rapid relief. In addition, pursuant to Section 33 (4) ARC, claims for damages and injunctive relief can also be asserted by associations. In contrast, the rebuttable presumption of harm under Section 33 (2) ARC still only applies to cartel conduct.

• Section 33b ARC: Decisions of the Commission on the designation of gatekeepers and on infringements of Articles 5-7 DMA are binding on the courts, i.e. the designation or infringement decisions cannot be challenged before the local courts. Although stand-alone claims may be more difficult than follow-on claims, as in general competition litigation, competitors and business users can use their industry and technology knowledge to identify and substantiate violations of the DMA.

• Section 33g ARC: Third parties affected by an infringement of the DMA may claim information from infringers and/or other third parties if (i) the information is necessary for the assertion of their claims and (ii) they can substantiate their claims (a certain degree of probability, so-called Glaubhaftmachung). This instrument can be particularly useful in the case of stand-alone claims.

• Section 33h ARC: In contrast to the regular limitation period of three years, the limitation period for claims based on the DMA is generally five years and is suspended during the Commission’s investigations and court proceedings. The commencement of the limitation period always requires the cessation of the infringement. This ensures that third parties definitely do not run out of time.

• Sections 87, 89 ARC: Judicial enforcement is concentrated in the antitrust courts, which are also responsible for DMA disputes. The antitrust experience of the courts may also be helpful in DMA disputes.

Kick-off – On the Way to full Effectiveness

That being said, potentially affected business users can now either discuss potential concerns of non-compliance with a respective national competition authority or use the Commission’s designation decisions in their private enforcement actions. In the future, parties will also be able to benefit from the Commission’s investigations (which the Commission intends to complete within 12 months, a relatively short timeframe).

The Commission has already designated six gatekeepers and 22 core platform services related to these gatekeepers in September 2023 (see here). Others have notified their potential gatekeeper status to the Commission and are now being investigated (see here). The designated gatekeepers have been given a period of six months to comply with the new obligations. As of 7 March 2024, these designated gatekeepers are now required to fully comply with the obligations of the DMA and to demonstrate their effective compliance by detailing the actions they have taken in compliance reports (see here). In addition, a first series of DMA compliance workshops have been held to allow gatekeepers to explain (and interested parties to challenge) the gatekeepers’ compliance measures (see here).

The Commission has already shown its willingness to investigate potentially non-compliant behaviour and has on 25 March 2024 announced that it had opened investigations into e.g. measures to prevent self-preferencing, compliance with user choice obligations, and pay or consent models (see here).

Next steps

It is now up to business users and / or competitors to enforce their rights under the DMA against unfair practices by the (so far and soon to be) designated gatekeepers. In particular, these rights may include:

• Opening up closed ecosystems – and claiming the right to operate own app stores or to distribute apps through alternative app stores

• Enhancing interoperability – and claiming for migration tooling or against unjustly blocking of innovative services

• Providing a level playing field – and preventing gatekeepers from unfairly promoting their own products

• Allowing fair use of data – and enforcing to have an overview of all the data stored and processed

We can help you restore a level playing field by applying our deep understanding of the digital sector in general and the DMA in particular. Just reach out.

 Authored by Elena Wiese and Julian Urban.