We offer our readers a synthesis of the 20 basic principles of the regulation of the «European Business Digitalization» (DME) established in the Digital Markets Act (DMA) (Regulation (EU) 2022/1925) and in the European Digital Services Act (DSA) (Regulation (EU) 2022/2065).
I. General aspects
1st. We use the term «European Business Digitalization» (EBD) to identify the process designed by Digital Markets Act (DMA), Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and Digital Services Act (DSA), Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market For Digital Services and amending Directive 2000/31/EC.
2nd. The context of both basic Regulations of the European Business Digitalization (EBD) process can be explained, in a broad sense, in two aspects:
a) Macro-regulatory, because digitalization appears as one of the two regulatory megatrends of the Single European Market, together with sustainability.
b) Micro-regulatory, because digitalization is based on two types of provisions: the general ones that regulate the digitalization of markets and services (DMA and DSA) and the special ones that regulate the applications of digitalization in certain market sectors. such as the digitalization of sales and consumer protection, corporate digitization, and financial digitalization, because the financial market increasingly operates through Fintech and Insurtech.
II. Digital Markets Acts (DMA, Regulation (EU) 2022/1925)
3rd. Scope of application of DMA is delimited by three operations:
a) Inclusion, because DMA shall apply to core platform services provided or offered by gatekeepers to business users established in the EU or end users established or located in the EU, irrespective of the place of establishment or residence of the gatekeepers and irrespective of the law otherwise applicable to the provision of service.
b) Exclusion, because DMA shall not apply to markets related to electronic communications networks (Article 2, point (1), of Directive (EU) 2018/1972) and electronic communications services (Article 2, point (4), of Directive (EU) 2018/1972), other than those related to number-independent interpersonal communications services.
c) Qualification, because DMA clarifies its regulatory scope making it expressly compatible with the EU regulations on interpersonal communication services and with general competition law.
4th. DMA will becoming in force from May 2, 2023; general date that is modified, for certain precepts, before or late.
5th. DMA structures digital markets according to the common regulatory paradigm used in financial markets, with some notable specialties in such a way that they present the following features:
a) Classifying activity phase refers to access to digital markets through the provision of core platform services.
b) Reservation of that typical activity to certain companies phase refers to gatekeepers -providing core platform services- to digital markets.
c) Requirement of conditions of access to the activity phase by such gatekeepers is not articulated -as it happens with the generality of financial intermediaries- by means of an administrative authorization in the strict sense; but through a “designation” process by the European Commission.
d) Requirement of conditions of exercise of the activity phase translates into a series of obligations enforceable to gatekeepers.
e) Public supervision of the exercise of the activity by gatekeepers phase translates into a series of investigative powers of those companies by the European Commission.
f) Sanction phase of the infractions of their obligations by the gatekeepers is projected in the competence of the European Commission to impose coercive and sanctioning fines.
6th. First regulatory phase of the classification of the activity refers to access to digital markets through the provision of core platform services that include online search engines, social networking services, application stores, certain Internet services, messaging, virtual assistants, web browsers, operating systems and online intermediation services. Specifically, DMA defines the «core platform service«, by reference to any of the following 10 services: online intermediation services, online search engines, online social networking services, video-sharing platform services, number-independent interpersonal communications services, operating systems, web browsers, virtual assistants, cloud computing services, online advertising services, including any advertising networks, advertising exchanges and any other advertising intermediation services, provided by an undertaking that provides any of the core platform services.
7th. Second regulatory phase of reserving that typical activity to certain companies refers to the access of gatekeepers -providers of core platform services- to the Digital Markets and operates through the «designation» technique by the European Commission.
8th. Third phase of the requirement of access conditions to activity by of gatekeepers is established through the process of designation of certain companies as gatekeepers by the European Commission when they meet the following three economic requirements: it has a significant impact on the internal market, it provides a core platform service which is an important gateway for business users to reach end users; and it enjoys an entrenched and durable position, in its operations, or it is foreseeable that it will enjoy such a position in the near future.
9th. Fourth phase of the requirement of conditions for the exercise of activity translates into a series of obligations that gatekeepers must comply with in such a way that the obligatory statute of the companies defined as gatekeepers is manifested in a positive and negative sense of obligations. of prohibitions or “practices of access gatekeepers that limit contestability or are unfair”.
10th. DMA will have effects in private law because the obligations and prohibitions established for gatekeepers may be invoked directly before the national courts to support the filing of direct claims for damages suffered by those harmed by the conduct of the noncompliant access guardians.
11th. Public supervision phase of the exercise of their activity by gatekeepers translates into a series of powers of the European Commission -as the sole authority- to investigate and supervise those companies, among which market investigations stand out.
12th. System of sanctioning the infractions of their obligations by gatekeepers completes the public supervision phase.
III. Digital Services Act (DSA, Regulation (EU) 2022/2065)
13th. Scope of application of the DSA involves the establishment of unified provisions in three areas:
a) Due diligence obligations tailored to certain specific categories of providers of intermediary services.
b) Liability of providers of intermediary services.
c) Implementation and enforcement of DSA, including as regards the cooperation of and coordination between the competent authorities.
14th. DSA will becoming in force on February 17, 2024. This norm of its general application is modified, for certain precepts, before or late.
15th. Like to what happens with the DMA, DSA structures the digital services market according to the common regulatory paradigm used in financial markets, with some special features:
a) Classifying activity phase refers to the provision of digital intermediary services of the information society.
b) Reservation of that typical activity to certain companies phase refers to the providers of those intermediary services.
c) Requirement of conditions of access to the activity by such companies phase is articulated by means of two mechanisms that allow us to differentiate two basic categories of intermediary service providers that are the normal size intermediary service providers and the service providers of very large online platforms and very large online search engines.
d) Requirement of conditions for carrying out the activity phase translates into a series of due diligence obligations that can be divided into two categories of due diligence obligations applicable to intermediary service providers in general and specific due diligence obligations adapted to certain specific categories of intermediary service providers.
e) Public supervision of exercise of activity phase by providers of intermediary services will be the responsibility of the competent authorities and the coordinators of digital services in each Member State in which they are established in coordination with the European Commission.
f) Penalty phase for breaches of their obligations by intermediary service providers is projected in the form of civil liability and administrative liability through the regime of coercive and penalizing fines by the respective Member State in which the service provider is established.
16th. First regulatory phase of classification of the activity refers to the provision of digital intermediary services of the information society that cover the three typified in article 3.g) of the DSA and can be one of the following information society services:
a) Mere conduit service, consisting of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network.
b) Caching service, consisting of the transmission in a communication network of information provided by a recipient of the service, involving the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information’s onward transmission to other recipients upon their request.
c) Hosting service, consisting of the storage of information provided by, and at the request of, a recipient of the service.
17th. Second regulatory phase of reserving that typical activites to certain companies refers to service providers of digital intermediary services of the information society; performing DSA double delimitation:
a) Spatial, because DSA will be applicable to intermediary services offered to service recipients who have their place of establishment or are located in the Union, regardless of where the providers of said intermediary services have their place of establishment.
b) Substantial, because DSA will be applied to the provision of digital intermediary services of the information society, which are mere conduit service, caching service and hosting service.
18th. Requirement phase of conditions of access to the activity by the service providers of digital intermediary services of the information society companies is articulated through two mechanisms that refer to two basic categories of intermediary service providers that are:
a) The qualification of the normal size intermediary service providers by the competent authorities and the digital service coordinators of the respective Member State.
b) The designation of very large online platform service providers and very large online search engines by the European Commission.
19th. Requirement phase of conditions for the exercise of the activity to the service providers of digital intermediary services of the information society is specified in the diligence that is required of them, which, in turn, is projected into two types of obligations that are:
a) General obligations of diligence required of intermediary service providers in general, what are the duties of location and transparency.
b) Specific obligations of due diligence adapted to certain specific categories of intermediary service providers that are adapted to the type of service provided and the dimension of the scope of provision of certain services.
20th. Public supervision of the activity exercise by intermediary service providers is projected in two phases:
a) Supervision of intermediary service providers phase, which distinguishes between normal-size and very large online platform service providers and very large online search engines.
b) Sanction of the infractions of their obligations by the intermediary service providers phase that is projected in their eventual civil or administrative liability.