EU's Digital Markets Act Faces Criticism Over Ambitious Timeline and Penalties
The Digital Markets Act (DMA), a new EU regulation aimed at reining in big tech companies, is facing criticism over its ambitious timeline and potential penalties. While the European People's Party (EPP) wants to bring the obligation into force in just 4 months, industry stakeholders warn that the changes required by the DMA are far greater than those needed for the GDPR, which was given a 24-month compliance period.
The DMA, once passed, will allow the Commission to start designating 'gatekeepers' within 6 months. However, some parliamentarians are pushing for even shorter compliance deadlines, with the Socialists and Democrats group proposing a mere 2-month period. The concern is that these tight timelines could prevent full compliance, as acknowledged by major tech firms such as Meta, Amazon, Alphabet, and Microsoft, who fear the short implementation deadlines.
The proposed penalties for non-compliance are also drawing criticism. The Commission can impose periodic penalty payments of up to 5% of the average daily turnover, with a maximum fine for a material breach of obligations reaching 10% of the total worldwide annual turnover. The Socialists and Democrats group has even suggested increasing this fine to 30% of total turnover. Industry stakeholders argue that these penalties are disproportionate and could drive companies to relocate outside the EU.
The DMA's implementation timeline and penalties are proving contentious, with industry stakeholders warning that the changes required are 'orders of magnitude greater' than those for the GDPR. As the EU lawmakers continue to debate the DMA, companies await clearer guidance on how to comply with the new rules within the proposed timeframes.
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