Europe gets it right as the DMA designates as a gatekeeper was designated as a “gatekeeper” in mid-May under the European Commission’s Digital Markets Act (DMA). 

The Digital Markets Act (DMA) aims to ensure more competition in European digital markets by stopping big corporations (gatekeepers) from abusing their market power and by letting new players enter the market. Fair competition, opportunities for innovation and lots of choice for customers drive most markets but what happens when some businesses are so big and key that they can distort those drivers to their advantage? 

The DMA ensures the large online platforms (e.g., Google, Apple etc.) behave in a fair way online and allow others to compete in their market. Put simply, the “gatekeepers” cannot create conditions where only they can benefit or survive.  

What does this mean and why is it good news for you? 

This means there will be do’s and don’ts that must comply with otherwise they will be fined. There are clear examples where small independent hotels have lost business due to practices that feel like an abuse of power (to list a few): 

  1. Undercutting of hotel rates 
  1. Rate parity clauses 
  1. Advertising under an independent hotel’s brand (name) 
  1. Not sharing key customer data has 6 months to comply with the relevant obligations under the DMA but some start applying with immediate effect. It’s not surprising that have complained bitterly about being designated a gatekeeper, they’re not happy! The simple fact they are now a “gatekeeper” points clearly to the need to reel in some business practices that were not benefiting the market. 

Note: The UK’s Competition and Markets Authority (CMA) is expected to bring in similar legislation in autumn 2024, when it could then designate certain companies active in the digital markets as holding “Strategic Market Status”. Whether they prove to be as proactive or effective as the EU remains to be seen… fingers crossed!