News Media Europe position Digital Markets Act proposal April 2021 2 2 1 2 3 3 1 Redacted.pdf

News  Media  Europe  position  paper  on  the  European
Commission proposal for a Digital Markets Act (DMA)

April 2021
News Media Europe (NME) represents the  progressive  news media industry in Europe  – over 2,500
media  companies  including  newspapers,  radio,  television  and  internet.  News  Media  Europe  is
committed  to  maintaining  and  promoting  the  freedom  of  the  press,  to  upholding  and  enhancing  the
freedom  to  publish,  and  to  championing  the  news  brands,  which  are  one  of  the  most  vital  parts  of
Europe’s creative industries.

Recommendations
•  Expand  the  obligation  in  Art.  6(1)k  for  gatekeepers  to  provide  “fair  and  non-
discriminatory general conditions of access” to all core platform services and not just app
stores to ensure the fair treatment of business users.

•  Build on the market investigation instrument under Art. 17 to allow the Commission to
impose  binding  and  tailored  codes  of  conduct  to  tackle  problems  related  to  the
bargaining power of gatekeepers.

•  Introduce  an  obligation  to  stop  quasi-tying  in  online  advertising  and  independent
oversight over certain gatekeepers decisions that raise concerns about privacy washing.

•  Consider whether a new obligation is needed to tackle questions related to the oversight
of standards created and managed by gatekeepers.

•  Include  web  browsers  and  digital  voice  assistants  in  the  definition  of  core  platform
service under Art. 2 to tackle problematic gatekeepers conduct in these areas.

•  Ensure  early  access  to  structural  remedies  without  a  requirement  of  last  resort  by
removing Art. 16(2) to avoid excessively onerous conditions.

•  Shorten the length of investigations from 6-12 to 4-8 months to ensure swift means of
intervention which are important in the absence of a “new competition tool”.

•  Revise Arts. 5 & 6 to clarify the universal scope of application of the obligations.

•  Maintain the clarification in Art. 1(5) that full harmonisation under the DMA is “without
prejudice to rules pursuing other legitimate public interests” such as media pluralism.

•  Ensure  a  stronger  Art.  3  definition  of  “users”  in  the  gatekeeper  designation  process,
including for “active users” and “business users”.

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Introduction
The European media sector is prime example of a sector with problems arising from the control that
gatekeepers exercise over access to online users and audiences. We therefore very much welcome
the proposal which seeks to address the clear limitations of anti-trust enforcement under TFEU 101
and 102, which is often slow, inefficient and difficult to implement in the context of digital markets.
The serious difficulties facing the news media business must be heeded as a serious warning by EU
policy makers. Our sector is probably the first to fully experience the unequal competition in relation
to the raw power of gatekeepers. It is also the first where we see the effects in terms of significant
revenue loss, with serious consequences for media pluralism.
Freedom of speech, freedom of the press and freedom of information are central and necessary values
in a democratic society. Together with trust and openness, both between people and between people
and social institutions, these values are under threat. The media sector is vital to uphold these values.
Therefore, measures that help strengthen the media sector also strengthen these values.
The DMA is a unique opportunity for the news media sector to emerge stronger and more resilient
from  the  current  crisis,  with  self-reliant  business  models  that  are  capable  of  supporting  quality
journalism and innovating in the digital age.

Scope and designation

It is important for the media that the proposal for full harmonisation of rules on gatekeepers should
not foreclose the possibility of further regulation of gatekeepers on other public interest grounds such
as media pluralism. This clarification in Art. 1(5) should thus be maintained and strengthened.

In so far as concerns the designation of gatekeepers in Art. 3, we agree with the proposed approach
to establish a combination of clear qualitative and quantitative criteria to identify gatekeepers which
provides the basis for a consistent designation mechanism.

However,  the  definitions  of  “users”  and  “turnover”  should  be  clarified  to  avoid  abuse,  while  the
designation process should also account for core platform services supplied beyond the EU but still in
the EEA and the United Kingdom to better reflect economic reality.

As concerns the notion of core platform services, we note with concern the exclusion of web browsers
and  digital  voice  assistants  which  appears  arbitrary.  Browsers  and  digital  voice  assistants  play  an
immensely important role in shaping the digital landscape and can be exploited by gatekeepers to lock
in users and to unilaterally impose standards.

This is also recognised in the impact assessment accompanying the DMA proposal1, and we therefore
recommend  including  web  browsers  and  digital  voice  assistants  as  a  core  platform  service.
Considering the amount of problematic conduct that is being shifted to browsers, such as Google’s
Federated Learning of Cohorts (“FLoCs”), it becomes evident that this is necessary.

Obligations and prohibitions

The DMA addresses major and long-standing competition concerns shared by the European media
sector  in  relation  to  access  to  data,  advertising,  self-preferencing  and  app  stores.  Out  of  the  18

1 European Commission (2020) SWD Impact Assessment accompanying the DMA proposal (link)
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obligations proposed under Arts. 5 & 6, we especially identify 13 with a direct practical application
addressing distinct and concrete antitrust concerns that we share.

We therefore support the introduction of  the suggested obligations to allow for efficient remedies
and greater transparency. We recommend that it is clarified so that both obligations under articles 5
and 6 have direct application for the purpose of legal and administrative certainty.

We must emphasise that access to  and control of data  about our own audiences is critical for the
development  of  our  ecosystem  and  the  ability  of  our  services  to  innovate  and  deliver  high  quality
content. Similarly, measures regarding online advertising markets are much needed given the high
levels of concentration and opacity present in these markets, in addition to conflicts of interest.

As  news  publishers  increasingly  invest  in  developing  their  own  technologies,  they  also  become
technology companies and accordingly compete with the products and services of gatekeepers. As a
result,  it  becomes  essential  that  rules  on  rankings  and  self-preferencing  as  well  as  on  non-
discriminatory access to app stores are introduced to ensure contestable and fair markets.

However, the requirement for gatekeepers to apply “fair and non-discriminatory general conditions
of access” as per Art. 6(1)k should not be limited to app stores, instead we propose to extend this
obligation  to  all  core  platform  services.  This  should  serve  as  a  basic  universal  requirement  for  all
companies with a gatekeeper status to ensure the fair treatment of business users. This would address
concerns about the exclusionary effects that the conduct gatekeeper of gatekeepers can have.

In relation to online advertising we propose, as suggested by an independent DMA study prepared for
the Commission2, further intervention to stop quasi-tying behaviour in advertising technology services
and  to  introduce  independent  oversight to  address  privacy  washing  concerns,  which  appear  when
platforms use privacy as a justification for practices that further cement their walled gardens.

The  need  for  stronger  intervention  against  anti-competitive  tying  and  bundling  practices  by
gatekeepers, however, extends beyond online advertising. In particular, there is a need to ensure that
unfair tying and bundling is prohibited in the context of licensing agreements that seek  to ensure a
fair transfer of value for content protected by intellectual property rights.

This  must  be  complemented  by  a  precautionary  approach  towards  the  creation  of  standards  by
gatekeepers,  which  the  DMA  unfortunately  overlooks  even  if  gatekeepers  play  a  key  role  in  this
context.  Standards  can  rapidly  become  problematic  and  arbitrary  because  gatekeepers  are  in  a
position to unilaterally determine and impose them, as illustrated by Google’s latest FLoCs advertising
project. The DMA should therefore allow for the review and prohibition of gatekeeper standards.

Similarly,  it  is  essential  that  a  level  playing  field  regarding  access  to  personal  data  is  established
between gatekeepers and business users. It is highly regrettable but needed that Art. 5(a) of the DMA
should enforce the General Data Protection Regulation’s purpose limitation on gatekeepers, as data
protection  authorities  have  so  far  failed  to  do  so,  distorting  competition  in  the  process.  This
prohibition should apply irrespective of whether gatekeepers obtain the consent of users.

In our view, the proposed structure of obligations under Arts. 5 & 6 can be improved by new wording
affirming the universal scope of the said obligations. It is essential that the Commission should in no
case bear a burden of proof, aside from the gatekeeper designation process, to demonstrate the anti-
competitive nature of gatekeeper practices.

2 Cabral et al. (2021) The EU Digital Markets Act: a report from a panel of economic experts (link)
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The DMA should maintain obligations that are sufficiently flexible to  cover different situations  and
enforceable with the limited administrative resources at the disposal of the European Commission.
The impact assessment raises concerns that the Commission may be underestimating the resources
required to ensure good enforcement3.

In this sense, it is important to retain obligations that are relatively simple and universal in scope to
ensure a lean and enforceable framework. The argument that “obligations should be more tailored to
business  models”  while  appealing  in  theory  also  implies  an  increased  drain  on  limited  public
administration  resources  that  is  difficult  to  justify  in  present  circumstances.  It  also  risks  creating
excessive discussions related to the various decisions issued by the Commission.

Tackling the bargaining power of gatekeepers

The ongoing negotiations between news media publishers and platforms show that there is a huge
imbalance in negotiating power that the DMA proposal fails to address. In anticipation of the entry
into force of the neighbouring right  for press publishers in June 2021, Google is  using its uniquely
strong  bargaining  position  to  conclude  agreements  with  European  publishers  that  raise  major
concerns about their standard of fairness and compliance with EU competition law.

As part of the agreements concluded under the News Showcase product, Google is able to tie and
condition remuneration under the EU publishers’ right to participation in its news product. In addition,
Google is able to further tie and bundle different products and services that publishers must use as
part  of  these  agreements  (e.g.  advertising,  analytics,  subscriptions,  etc.)  and  to  introduce  unfair
clauses, such as clauses prohibiting publishers from taking legal action against Google on grounds of
usage of the content covered by the agreements.

To illustrate this problem, it is relevant to consider the case of France, where a group of 121 publishers
concluded  a  deal  worth  USD  22  million  per  year  with  Google4,  whereas  in  Australia,  where  the
government threatened to introduce  a binding arbitration mechanism in law, Google subsequently
offered publishers a figure worth at least USD 100 million5. As a result, Australian publishers are set
to receive five times the amount offered to French publishers, for a market less than half of the size
of France, making the difference even more aggravating.

The French case in particular demonstrates that, even in the presence of support from the government
and anti-trust authorities to conduct collective negotiations, Google is still able to impose poor terms
and  conditions,  especially  when  compared  with  the  Australian  case,  because  of  the  superior
bargaining power that it derives from its gatekeeper position. We wish to highlight that this type of
problematic  situation  where  business  users  are  unable  to  genuinely  bring  gatekeepers  to  the
negotiating table is not unique to either Google nor to intellectual property licensing agreements.

The  value  of  the  agreements  concluded  in  France,  their  terms  and  conditions  and  the  negotiation
process  that  lead  to  their  conclusion  all  raise  question  about  fairness,  one  which  requires  a  firm
response  as  part  of  the  DMA  discussion.  As  a  gatekeeper,  Google  is  able  to  put  take-it-or-leave  it
agreements on the table, and more critically to tie and bundle remuneration under the EU publishers’
right to participation in Google’s own news product “Google News Showcase”.

3 European Commission (2020) SWD Impact Assessment accompanying the DMA proposal (link)
4 Reuters (2021) Exclusive: Google's $76 million deal with French publishers leaves many outlets infuriated
(link)
5 Australian Financial Review (2021) Facebook signs deals with independent publishers (link)
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This  fundamentally  undermines  the  Copyright  Directive,  which  is  meant  to  secure  the  ability  of
publishers to control how their content is distributed. Google’s News Showcase product appears to
many publishers as a cynical attempt at expropriating the monetisation of content, the distribution of
content, and at disintermediating publishers further from their audiences and advertisers, rather than
ensuring that publishers are remunerated for the use of their content, as required by the Directive.

These agreements essentially amount to a new standard that Google is able to impose by leveraging
its gatekeeper position. Google successfully invented a new product and de facto standard where all
present  and  future  rights  are  bundled  and  licensed  across  all  Google  news  products,  undermining
established licensing procedures where rightsholders are remunerated for the use of their content.

It is in this sense necessary to consider whether the  problematic conduct of Google are mere anti-
trust  concerns,  or  more  fundamentally  related  to  problems  of  fairness  inherent  in  dealings  and
negotiations with gatekeepers, where huge imbalances in bargaining power can be found - a problem
exacerbated by the lack of regulatory oversight over these agreements. By taking decisive action in
this area of gatekeeper regulation, serious media pluralism concerns could simultaneously be tackled.

We believe that many of the issues raised above deserve special attention in the discussion on the
DMA proposal. While it is clear that the DMA cannot solve all the competition problems faced by news
publishers, it is also evident that some of these problems manifest dimensions that are relevant to the
regulation of gatekeepers. In Australia, the competition authority concluded that a tailored code of
conduct was necessary to ensure pro-competitive outcomes.

While it is not so clear how an arbitration mechanism could fit in the DMA, it seems imperative to
ensure some regulatory oversight in relation to these agreements which are currently being used to
circumvent regulatory scrutiny. One option could be to empower the Commission to impose codes of
conduct  on  gatekeepers  (e.g.  bargaining  code)  following  a  market  investigation  and  findings  that
would support this course of action.

A recent study of the European Parliament6 also argues for the need to complement the ex-ante rules
in the Commission proposal with tailored codes of conduct to ensure that public policy objectives are
effectively met. Enhancing and expanding the market investigation tool under Art. 17 could be one
way of achieving this within the boundaries of the Commission’s proposal.

Market investigations

Concerns  about  whether  the  DMA  enables  rapid  intervention  are  particularly  important  since  the
Commission abandoned the idea of introducing a “new competition tool” to complement the ex-ante
rules.  The procedural delays foreseen  in the proposal,  such as the  6-12 months period to conduct
market investigations under Arts. 15, 16 and 17 are excessive and could hamper meaningful action.

We suggest a 4-8 months period instead to ensure the kind of timely market intervention necessary
to prevent material harm or tipping markets, in line with the ex-ante rationale. This will also facilitate
the use of interim measures which now play a key role in enforcement.

It is equally important that structural remedies do not become a tool of last resort as suggested in Art.
16(2) as this creates excessively onerous conditions to be met. This also undermines the disciplining
effect  that  the  proposed  instrument  should  have  on  the  behaviour  of  gatekeepers.  Ideally,  the
Regulation should dissuade effect gatekeepers from engaging in anti-competitive conduct.

6 European Parliament Research Service (2021) Online platforms: Economic and societal effect (link)
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Enforcement

In  relation  to  enforcement,  it  is  important  that  the  European  Commission  is  empowered  to  make
independent  enforcement  decisions  as  currently  envisaged.  The  experience  of  our  sector  with
enforcement shows that it can be problematic to rely on the often-limited resources and expertise of
individual national authorities to investigate the practices and sectors concerned.

So while it is tempting for Member States  with greater resources at their disposal to seek greater
autonomy in enforcement matters, this should not come at the expense of the ability of the European
Commission  to  intervene  when  and  where  needed.  It  is  also  desirable  from  the  perspective  of
consistent enforcement for the Commission to be able to issue binding decisions.

Last  but  not  least,  it  cannot  be  stressed  enough  how  important  it  is  to  ensure  that  DG COMP  has
adequate resources at its disposal to ensure good enforcement, both in terms of human resources
and funding. We are concerned that the European Commission underestimates this point, judging by
the contents of the impact assessment that accompanied the proposal.

Ultimately,  ensuring  good  enforcement  may  prove  to  be  the  most  difficult  question.  The  DMA
proposal is by and large already much welcome on the basis of substance. Therefore, it is important
to draw on recent experience  of regulation affecting gatekeepers. The GDPR is a case in point and
highlights important lessons regarding asymmetric enforcement.

For further background on this position paper, please consult our full submission to the Digital Services
Act package and the New Competition Tool public consultations 2020.

Contacts

, Executive Director,
@newsmediaeurope.eu
, Policy Manager,
@newsmediaeurope.eu
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