IMCO

MOTION FOR A RESOLUTION BY THE COMMITTEE ON INTERNAL MARKET AND CONSUMER PROTECTION 

Shaping Europe’s fit for the digital age: European Commission adopted its proposal for the Digital Markets Act, which aims to ensure fair and open digital markets. Considering that this proposal focuses on large online platforms acting as “gatekeepers”, what other steps should the EU take to drive competitiveness, increase choices for consumers and create a sustainable strategy for digital markets?

Submitted by: Julia la Bastide (NL), Bobby Blaauw (NL), Zeynep Dilara Dinçer (TR), Anouk Graven (NL),  Maud Houtekamer (NL), Mike Roelofs (NL), Tommie Steenwinkel (NL), Wouter Verheijen (NL), Storm Visser (NL), Steven Voerknecht (NL), Esin Esendemir (Chairperson, NL)

The European Youth Parliament,

  1. Concerned by the fact that large online platforms, considered gatekeepers1  A gatekeeper is a company that meets the qualitative criteria of having a durable strong economic position in the market, linking large user bases with at least 45 million monthly active end users to 10,000 yearly active business users while having significant impact on the internal market, being active in at least three EU countries in the last three years., hold power over businesses by means such as, but not limited to:
    1. the usage of network effects2 A network effect is a phenomenon whereby increased numbers of people or participants improve the value of a good or service., which other businesses have no access to,
    2. the dependence of non-technology businesses on the gatekeeper platforms,
  2. Alarmed by the fact that the merging of companies reduces competition and negatively affects consumers,
  3. Noting with concern that gatekeepers are able to artificially manipulate the digital market on their own platforms for their benefit, which in turn:
    1. possibly reduces consumer choice, resulting in higher prices and lower quality of products,
    2. limits the potential of other companies to market and sell their products on equal terms, negatively affecting the competitiveness of the digital market,
  4. Pointing out that gatekeepers are using the exclusivity of products as a marketing tool which narrows digital markets,
  5. Noting with concern that gatekeepers and their respective operating systems, for example iOS and Android, have an advantage due to the use of certain pre-installed apps which are difficult or impossible to delete,
  6. Concerned with the inflexibility of the Digital Market Act (DMA) regarding both the definition of and regulations on gatekeepers, especially in terms of:
    1. the legislation being future-proof,
    2. vulnerability for loopholes,
  7. Aware of the fact that the DMA does not consider multi-homing3 Multi-homing refers to the user or business’s ability to use multiple platforms for the same purpose. a part of classifying gatekeepers,
  8. Emphasising that the DMA does not take into account the respective size of markets4 Markets can be specifically targeted towards small demographics. A company within such a market can still hold a gatekeeper-like position, even if they are not currently recognized as one. when clarifying gatekeepers, possibly leaving out gatekeeping companies in niche markets,
  9. Conscious about GAFAM companies5  The five biggest US tech companies: Google (Alphabet), Apple, Facebook, Amazon, and Microsoft., who are the most important group of gatekeepers, having large benefits in consumer data giving them unfair advantages when compared to other businesses;
  1. Calls upon the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) to readjust the DMA considering the collection and usage of consumer data, specifically:
    1. adding a duty for gatekeepers to release yearly reports stating the contents of their collected data, its source and purpose,
    2. prohibiting the exchange and combination of data from different sources within a company;
  2. Urges DG GROW to require hardware companies to ask the user for consent to download pre-installed apps recommended by the designated gatekeeper;
  3. Expresses its appreciation for DG GROW for prohibiting the signing of exclusivity agreements between platforms and producers, regarding products created by a third party;
  4. Calls upon the European Commission to establish a new Directorate-General for Digital Market Regulations and Fairness (DG MARKET), with the main tasks of:
    1. advising DG GROW,
    2. investigating the state of free competition in digital markets;
  5. Calls upon DG MARKET to annually organise at least two specific assemblies with gatekeepers, with the aims of:
    1. having DG GROW attend as an observing member,
    2. negotiating the data reports and possible updates to the search algorithms,
    3. evaluating the current state of affairs in the digital market space every six months to assess the need for a revisal of the DMA;
  6. Instructs DG GROW to adjust the DMA, if so decided on the aforementioned conference;
  7. Strongly appeals to gatekeeper companies to make such changes to their search algorithms as  deemed necessary by DG MARKET;
  8. Instructs DG MARKET to review the definition of “gatekeeper” companies applied in the DMA, taking into account new criteria such as:
    1. the market share of a company on the designated market,
    2. the economies of scale and associated benefits that a certain company has over other companies in their respective market;
  9. Suggests DG MARKET to allow companies to have their status as gatekeeper reassessed following changes in the DMA or the company’s policies or structure;
  10. Instructs DG MARKET to launch a large-scale investigation into the malpractice of search results manipulation, and all associated consequences;
  11. Invites gatekeepers to annually release transparency updates regarding their search algorithms.