The DMA and the EU’s French Presidency: The Road to Precaution and Tensions

Aurelien Portuese, “The DMA and the EU’s French Presidency: The Road To Precaution and Tensions,” Competition Forum, 2021, n° 0029.

Summary

The Digital Markets Act (DMA) proposed by the European Commission in December 2020 appears likely to be adopted early next year during the French Presidency of the European Union (EU). Indeed, on November 23, 2021, the European Parliament’s Committee on Internal Market and Consumer Protection approved the DMA following compromises and 1,199 amendments. On November 25, 2021, the Competitiveness Council of the Council of the EU unanimously approved the DMA (as well as the Digital Services Act) labeled as to its “general approach.” On November 30, the European Parliament issued its DMA report. The plenary vote is due to take place on December 15. The approved text will thus become the Parliament’s mandate for negotiations with EU governments during the French Presidency of the EU in the first semester of 2022. Despite domestic presidential elections in April, the EU’s French Presidency will thus be critical for adopting the DMA especially in ways to minimize harmful unintended consequences. The French Presidency has already identified the DMA as one of the priority pieces of legislation for its EU Presidency.

These unintended consequences are considerable since the DMA regulates how innovative companies can compete in the market. The DMA does so by singling out a handful of mostly large U.S. tech companies, imposing a wide range of obligations and prohibitions on them while leaving their direct competitors exempt from such obligations. The resulting uneven playing field would generate unfair competition rather than a stronger competition on the merits.

This article discusses the extent to which the DMA reflects portrays a precautionary logic to regulate innovative companies. It then discusses the legislative evolution of the DMA and how the latest version reinforces the precautionary obligations imposed on the designated platforms. It concludes with a discussion of the EU’s French Presidency’s role in finalizing a highly problematic text in early 2022.