NEWS25 November 2021

EU digital markets act passes committee

Europe GDPR News Privacy Technology

EUROPE – A European Union committee has voted in favour of a pro-competition law targeted at digital “gatekeepers” imposing restrictions on the use of data for targeted or micro-targeted advertising.

EU Commission HQ

The Internal Market and Consumer Protection Committee voted by 42 votes to two in favour of the Digital Markets Act, which blacklists certain practices by large tech platforms called “gatekeepers”.

The law applies to “core platform services”, which are defined by the act as major companies with €8 billion in annual turnover and 45 million monthly service users operating in areas such as online intermediation services, social networks, search engines, operating systems, online advertising services, cloud computing and video-sharing services.

The law will require gatekeepers to introduce additional requirements on the use of data, stating that a gatekeeper should “for its own commercial purposes, and the placement of third-party advertising in its own services, refrain from combining personal data for the purpose of delivering targeted or micro-targeted advertising”, except if there is a “clear, explicit, renewed, informed consent”.

Children’s personal data will also not be allowed to be processed for commercial purposes, such as direct marketing, profiling and behaviourally-targeted advertising.

The act would also grant the European Commission the power to restrict gatekeepers from making acquisitions in order to protect the “internal market”.

MEPs propose creating a “European high-level group of digital regulators” to facilitate cooperation and coordination between the European Commission and member states in their enforcement decisions.

Minimum fines will be imposed of between 4% and 20% of total turnover.

The Digital Markets Act will now move to a plenary vote in December 2021, after which the approved text will then become European parliament’s mandate for negotiations with EU governments in 2022.

The Digital Services Act – a parallel proposal to regulate online platforms – will be voted on by the committee at a future meeting.

Anna Cavazzini, chair of the Internal Market and Consumer Protection Committee, said: “Currently, a few large platforms and tech players prevent alternative business models from emerging – including those of small and medium-sized companies.

“Often, users cannot choose freely between different services. With the Digital Markets Act, the EU is putting an end to the absolute market dominance of big online platforms.”