What is the EU Digital Markets Act (DMA)?

Q: What "Core Platform Services" (CPS) are covered under the DMA?

Web Browsers and Search Engines: The primary entry points controlling how users find SaaS solutions online. Operating Systems and Cloud Services: These environments host cloud applications and infrastructure-as-a-service (IaaS), respectively. Social Networks and Video Sharing: These are the main platforms functioning as professional networks and corporate media. Interpersonal Messaging Services: These are the communication platforms underpinning team collaboration applications.

Q: How do you achieve DMA compliance as a gatekeeper?

1. Install thoroughly documented, fair, and open APIs that enable external software to connect with your main systems. 2. The company's search results are structured to avoid presenting its own software or applications with an inherent ranking advantage over third-party alternatives. 3. Access to user-generated performance data for business customers typically involves characteristics such as availability without significant delay, secure transmission, and the option to download.

Author: Oleksandra Butenko, Copywriter

Reviewed by: George Ploaie, Chief Operating Officer (COO)

What is the EU Digital Markets Act (DMA)?

The Digital Markets Act is legislation from the European Union that addresses the market position of prominent online platforms, with the objective of influencing their conduct and preventing certain market restrictions. This situation influences the competitive landscape for software companies by prompting larger tech entities to provide access to their ecosystems for additional applications and vendors.

This strategy can lead to a series of results for the European SaaS ecosystems, such as new modes of market access, shifts in the freedom of choice, and a different extent of reliance on monopolistic distribution ‍‌‍‍‌‍‌‍‍‌channels.

What "Core Platform Services" (CPS) are covered under the DMA?

Web Browsers and Search Engines: The primary entry points controlling how users find SaaS solutions online.
Operating Systems and Cloud Services: These environments host cloud applications and infrastructure-as-a-service (IaaS), respectively.
Social Networks and Video Sharing: These are the main platforms functioning as professional networks and corporate media.
Interpersonal Messaging Services: These are the communication platforms underpinning team collaboration applications.

What revenue/user-count thresholds trigger gatekeeper designation?

The designation as a “gatekeeper” by the European Commission is automatic if the company meets the strict quantitative and qualitative conditions for several financial years. Below are the financial and structural conditions:

Financial Turnover: An annual turnover within the euro area of more than €7.5 billion, or a market capitalization of at least €75 billion.
User Base Reach: Administration of a core platform that has more than 45 million regular monthly active end-users who are either established in or located in the EU.
Corporate Scale: The provision of services to more than 10,000 active business users annually who are located in the EU.

How does the DMA reshape B2B SaaS interoperability?

Regulatory Dynamic	+	–
Interoperability Mandates	Provides a mechanism for independent software to establish compatibility with dominant operating systems.	Alignment with gatekeeper APIs necessitates technical adjustments as they change.
Data Portability Rules	Facilitates data migration, which can influence vendor dependencies for enterprise clients.	Requires adherence to data protection and security standards.

How do you achieve DMA compliance as a gatekeeper?

Install thoroughly documented, fair, and open APIs that enable external software to connect with your main systems.
The company’s search results are structured to avoid presenting its own software or applications with an inherent ranking advantage over third-party alternatives.
Access to user-generated performance data for business customers typically involves characteristics such as availability without significant delay, secure transmission, and the option to download.

What are the fines for non-compliance?

The enforcement of compliance by the European Commission features financial penalties that may relate to global revenue outcomes. The regulatory framework includes a provision for the authority to apply financial measures, up to 10% of a gatekeeper’s total worldwide turnover from the previous financial year, in circumstances of non-compliance with mandated requirements.

Conclusion

While it entails requirements for advanced technical solutions and robust security controls from gatekeepers, it offers independent SaaS companies a broader operational scope, additional distribution channels for their products, and increased system integration options.

Key takeaways

The DMA mandates that certain large technology companies provide access to their Core Platform Services (CPS), such as operating systems, web browsers, and cloud networks, which influence market access for independent SaaS providers.

The gatekeepers implementing an open API, enabling third parties to integrate their software with the gatekeepers’ ecosystems, would be a major change. The transformations incorporate a cessation of self-preferencing and a major expansion in data portability.

Meeting certain quantitative benchmarks is a factor in classifying technology providers as gatekeepers; non-adherence to requirements by these providers may entail specific penalties. The established limits for financial penalties are set at a maximum of 10% of global annual turnover, with a provision for this limit to be 20% for repeated non-compliance.

Concept snapshot

Digital markets act

Category: Regulatory Compliance, Market Strategy.

Used By: SaaS Founders, Chief Technology Officers (CTOs).

Primary Purpose: To govern and enforce fair market competition by forcing dominant technology platforms (“Gatekeepers”) to open their Core Platform Services (CPS) to independent SaaS vendors, eliminating self-preferencing and mandating system interoperability.