Respondents to a European Commission (EC) survey called for stronger enforcement and expansion of its rules governing competition in the digital market to cover new areas such as artificial intelligence (AI), according to a new review.
However, some global technology companies criticized the design and implementation of the act, saying it hampered competition and harmed user experience.
The EC released its first review of the Digital Markets Act (DMA), arguing that the law is working effectively in its aim to promote fair competition and encourage innovation in the digital economy.
A working document accompanying the review states that “a tangible positive impact” had been achieved within just over two years of the DMA coming fully into force.
The EC also believes the DMA has “still not reached its full potential”, noting that respondents to a public consultation accompanying the review called for more “robust” enforcement through stronger use of sanctions, including higher fines, and the use of interim measures to more quickly tackle anticompetitive behavior.
The DMA is the EU’s landmark policy aimed at limiting the influence of technology giants such as Apple, Google and Meta and promoting fair competition.
The act, which came into full effect in 2024, bars companies from prioritizing their own products in search results and requires them to permit access to third-party app stores.
Under the act, companies can face sanctions, including fines. Apple and Meta are at present facing fines of $588m and $235m respectively, though both companies have appealed the verdicts.
Apple was found to have prevented app developers from informing customers, free of charge, of alternative offers outside the App Store, steering them to those offers and allowing them to make purchases.
Meanwhile, Meta was penalized for what the EC calls its "consent or pay" model, which requires users to consent to their data being combined across its Facebook and Instagram platforms or pay a subscription.
The DMA requires that users who do not consent must have access to a less personalized but equivalent alternative. Meta was therefore found to have failed in this obligation.
Industry Pushback
Not everyone believes the structure and implementation of the act are working effectively, however. Amazon’s director of EU public policy, James Waterworth said recently “the regulation has stalled investment, damaged the consumer experience, and done nothing to address the challenges of affordability”.
Amazon is one of two companies currently being scrutinized by the EC to assess if they should be designated as a “gatekeeper” and therefore brought under the remit of the act. The other company is Microsoft.
Speaking at the European Competition Day in Brussels on 23 April, Waterworth said that “achieving the goals of the DMA such as enhancing contestability while preserving or enhancing innovation is important”.
However, he criticized the act’s “one size fits all” approach, saying it “creates real and unjustified distortions”. Waterworth added that regulatory fragmentation means the company faces “overlapping and contradictory enforcement that weakens the Single Market and creates legal uncertainty”.
In addition to calls for greater enforcement, a “sizeable group of stakeholders” who participated in the consultation urged that the DMA be revised “to address new challenges around contestability and fairness in digital markets”.
The EC highlights AI and cloud computing services as being two areas in need of particular focus, though it notes that existing competition regulations adequately cover the challenge posed by AI.
According to a working document accompanying the review, the Commission is not looking to amend the DMA at present, arguing it is “fit for purpose”.
AI Regulation Postponed
The EC's decision not to place AI companies under the act for now comes as the European Union moves to halt the introduction of certain regulations of the new technology.
A deal signed on 7 May has postponed legislation that would restrict high-risk uses of AI in the EU, after many companies within the industry warned the design and application of the AI Act meant Europe faced falling behind in the AI race.
Some elements of the AI Act came into force in 2024, but others, including those covering high-risk AI and transparency, had been due to take effect in August this year.
High-risk areas include biometrics, critical infrastructure, education, employment, migration, asylum and border control. These provisions will now apply from 2 December 2027.
The deal also largely exempted the use of AI in industrial applications from the scope of the law, after German Chancellor Friedrich Merz pushed for the change to keep tech heavyweights Siemens and Bosch competitive.
Welcoming the deal, Commission President Ursula von der Leyen said it “provides a simple, innovation-friendly environment” for AI in Europe.
“At the same time, we are strengthening protections for our citizens. For safe and simple AI governance in Europe”, she said on X.