{"id":61911,"date":"2024-03-21T21:17:40","date_gmt":"2024-03-21T12:17:40","guid":{"rendered":"https:\/\/monolith.law\/en\/?p=61911"},"modified":"2024-04-17T21:29:13","modified_gmt":"2024-04-17T12:29:13","slug":"digital-market-law","status":"publish","type":"post","link":"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law","title":{"rendered":"Explaining the Basics of the EU's Digital Markets Act (DMA): What is its Impact on Japan?"},"content":{"rendered":"\n<p>The &#8220;Digital Markets Act (DMA)&#8221; is a law enacted by the European Union (EU) in 2023 with the aim of ensuring fairness in the EU&#8217;s digital markets. Japanese companies looking to expand their business within the EU may have many questions about what kind of measures are necessary and what they should be aware of under this new legislation.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_53 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#What_is_the_Digital_Markets_Act_DMA\" title=\"What is the Digital Markets Act (DMA)?\">What is the Digital Markets Act (DMA)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Differences_Between_DMA_and_GDPR\" title=\"Differences Between DMA and GDPR\">Differences Between DMA and GDPR<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Key_Points_in_Understanding_the_DMA\" title=\"Key Points in Understanding the DMA\">Key Points in Understanding the DMA<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Entities_Subject_to_Gatekeeper_Regulation\" title=\"Entities Subject to Gatekeeper Regulation\">Entities Subject to Gatekeeper Regulation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Regulations_for_Gatekeepers\" title=\"Regulations for Gatekeepers\">Regulations for Gatekeepers<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Penalties_for_Violating_the_DMA\" title=\"Penalties for Violating the DMA\">Penalties for Violating the DMA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#The_Impact_of_the_DMA_on_Japan\" title=\"The Impact of the DMA on Japan\">The Impact of the DMA on Japan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Three_Other_EU_Regulations_You_Should_Know_Besides_the_DMA\" title=\"Three Other EU Regulations You Should Know Besides the DMA\">Three Other EU Regulations You Should Know Besides the DMA<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Data_Act_DA\" title=\"Data Act (DA)\">Data Act (DA)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Digital_Services_Act_DSA\" title=\"Digital Services Act (DSA)\">Digital Services Act (DSA)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Digital_Governance_Act_DGA\" title=\"Digital Governance Act (DGA)\">Digital Governance Act (DGA)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Summary_Understanding_EU_Regulations_is_Essential_for_Business_Expansion_into_the_EU\" title=\"Summary: Understanding EU Regulations is Essential for Business Expansion into the EU\">Summary: Understanding EU Regulations is Essential for Business Expansion into the EU<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/monolith.law\/en\/general-corporate\/digital-market-law\/#Guidance_on_Measures_by_Our_Firm\" title=\"Guidance on Measures by Our Firm\">Guidance on Measures by Our Firm<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Digital_Markets_Act_DMA\"><\/span>What is the Digital Markets Act (DMA)?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Digital Markets Act (DMA) is a regulation of the European Union (EU) that was enacted on November 1, 2022 (2022\u5e7411\u67081\u65e5), and came into force on May 2, 2023 (2023\u5e745\u67082\u65e5). It aims to curb the market dominance of large corporations and create a more accessible environment for new platformers to enter, thereby enhancing the competitiveness of the EU&#8217;s digital market.<\/p>\n\n\n\n<p>The DMA can also be seen as antitrust legislation primarily targeting the five major American internet service companies\u2014known as Big Tech\u2014which include Google LLC, Apple Inc., Meta Platforms, Inc., Amazon.com, Inc., and Microsoft Corporation\u2014that hold dominant positions in the market. Consequently, the regulation focuses on &#8216;gatekeepers,&#8217; which are platformers of a certain scale.<\/p>\n\n\n\n<p>Reference: <a href=\"https:\/\/digital-markets-act.ec.europa.eu\/about-dma_en\" target=\"_blank\" rel=\"noreferrer noopener\">European Union Official Website &#8220;About the DMA&#8221;[ja]<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Differences_Between_DMA_and_GDPR\"><\/span>Differences Between DMA and GDPR<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The GDPR is a legislative act concerning the protection of personal data within the European Union (EU). The following figure compares the differences between the DMA and the GDPR.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><\/td><td>DMA<\/td><td>GDPR<\/td><\/tr><tr><td>Overview<\/td><td>Prohibits service monopolies on platforms by gatekeepers, including the Big Tech 5<\/td><td>A legal framework that establishes guidelines for the handling of personal information of individuals residing in the EU<\/td><\/tr><tr><td>Fines<\/td><td>Up to 10% of revenue (up to 20% for repeated violations)<\/td><td>The higher of \u20ac10 million or 2% of revenue, or \u20ac20 million or 4% of revenue<\/td><\/tr><tr><td>Regulated Entities<\/td><td>Big Tech<\/td><td>All IT companies<\/td><\/tr><tr><td>Protected Parties<\/td><td>Businesses that are not gatekeepers, including small and medium-sized enterprises<\/td><td>Individuals<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The DMA targets Big Tech and gatekeepers for regulation, protecting other companies. In contrast, the GDPR regulates all business operators and protects all individuals residing within the EU.<\/p>\n\n\n\n<p>On the other hand, the GDPR is a law that regulates all IT business operators and protects all individuals residing within the EU.<\/p>\n\n\n\n<p>Since the enactment of the &#8216;Directive on Electronic Commerce&#8217; in 2000, there have been no revisions to regulations concerning consumer protection or the prevention of unfair practices in services offered by Big Tech. Therefore, it is conceivable that the DMA was proposed to address the negative impacts on companies other than gatekeepers.<\/p>\n\n\n\n<p>Related article: <a href=\"https:\/\/monolith.law\/corporate\/gdpr-personal-information-protection-law\" target=\"_blank\" rel=\"noreferrer noopener\">What is GDPR? A Comparison with Personal Information Protection Law and Key Points for Japanese Companies to Be Aware Of[ja]<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Points_in_Understanding_the_DMA\"><\/span>Key Points in Understanding the DMA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In this section, we will introduce the key points for understanding the DMA. There are two main points:<\/p>\n\n\n\n<ul>\n<li>Businesses subject to the Gatekeeper designation<\/li>\n\n\n\n<li>Regulations applicable to Gatekeepers<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Entities_Subject_to_Gatekeeper_Regulation\"><\/span>Entities Subject to Gatekeeper Regulation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Under the DMA (Digital Markets Act), the entities that are regulated as gatekeepers are as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Significant impact on the EU internal market<\/td><td>Having achieved a certain annual turnover within the European Economic Area (EEA) and providing core platform services in at least three EU member states<\/td><\/tr><tr><td>Controlling important gateways<\/td><td>Providing core platform services to more than 45 million active end-users and over 10,000 active business users per month within the EU<\/td><\/tr><tr><td>Sustainable and established position<\/td><td>Meeting the above criteria for the past three years<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Reference: <a href=\"https:\/\/commission.europa.eu\/strategy-and-policy\/priorities-2019-2024\/europe-fit-digital-age\/digital-markets-act-ensuring-fair-and-open-digital-markets_en\" target=\"_blank\" rel=\"noreferrer noopener\">The Digital Markets Act: ensuring fair and open digital markets[ja]<\/a> | Europa Commission<\/p>\n\n\n\n<p>The European Commission states that the DMA is a form of ex post regulation that applies after the exercise of constitutional rights, complementing European competition law (a legal framework that regulates market pressures by economic entities such as large corporations and states). Therefore, it does not restrict the enforcement of European competition law or the competition laws of individual EU member states.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Regulations_for_Gatekeepers\"><\/span>Regulations for Gatekeepers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Under the DMA, regulations for gatekeepers are defined as the following two categories:<\/p>\n\n\n\n<ul>\n<li>Actions that must be taken (Do\u2019s)<\/li>\n\n\n\n<li>Actions that must not be taken (Don\u2019ts)<\/li>\n<\/ul>\n\n\n\n<p>First, the table below summarizes the actions that gatekeepers are required to take.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td colspan=\"2\">Actions Gatekeepers Must Take (Do\u2019s)<\/td><\/tr><tr><td>1<\/td><td>Allow interoperability with third-party services in certain circumstances<\/td><\/tr><tr><td>2<\/td><td>Ensure business users have access to data generated while using the gatekeeper\u2019s platform<\/td><\/tr><tr><td>3<\/td><td>Provide tools and information necessary for advertisers and publishers to independently verify their own advertisements hosted by the gatekeeper<\/td><\/tr><tr><td>4<\/td><td>Enable business users to promote their offers and conclude contracts with customers outside of the gatekeeper\u2019s platform<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The Do\u2019s focus on prohibiting market monopolization by big tech and gatekeepers. Conversely, the table below lists the actions that gatekeepers are prohibited from taking.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td colspan=\"2\">Actions Gatekeepers Must Not Take (Don\u2019ts)<\/td><\/tr><tr><td>1<\/td><td>Favor their own services or products in rankings over similar services or products offered by third parties on their platform<\/td><\/tr><tr><td>2<\/td><td>Prevent consumers from linking to businesses outside the platform<\/td><\/tr><tr><td>3<\/td><td>Make it impossible for users to uninstall pre-installed software or apps if they wish to do so<\/td><\/tr><tr><td>4<\/td><td>Track end-users outside of the gatekeeper\u2019s core platform services for targeted advertising without obtaining valid consent<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>This also prohibits market monopolization by big tech and gatekeepers, as well as intentional manipulation of information.<\/p>\n\n\n\n<p>Reference: <a href=\"https:\/\/commission.europa.eu\/strategy-and-policy\/priorities-2019-2024\/europe-fit-digital-age\/digital-markets-act-ensuring-fair-and-open-digital-markets_en\" target=\"_blank\" rel=\"noreferrer noopener\">The Digital Markets Act: ensuring fair and open digital markets[ja]<\/a> | Europa Commission<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalties_for_Violating_the_DMA\"><\/span>Penalties for Violating the DMA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the event of a violation of the DMA, the company in question may be subject to a fine of up to 10% of its total worldwide sales. Should the violations continue, the fine could increase to as much as 20% of the company&#8217;s global sales.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Impact_of_the_DMA_on_Japan\"><\/span>The Impact of the DMA on Japan<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/monolith.law\/wp-content\/uploads\/2023\/12\/tower-modern-beautiful-skyline-capital-1024x643.jpg\" alt=\"Photo of a building landscape\" class=\"wp-image-63773\" \/><\/figure>\n\n\n\n<p>While the EU&#8217;s digital market is undergoing significant changes, the direct impact on Japan is expected to be minimal. However, as the services offered by Big Tech are anticipated to undergo substantial changes, the effects could be considerable.<\/p>\n\n\n\n<p>On the other hand, changes in Big Tech services could also present new business opportunities. With the implementation of the DMA, third parties will be able to interoperate with gatekeeper services, enabling this potential.<\/p>\n\n\n\n<p>For example, where service A could previously only interact within its own platform, it may now be possible to communicate across to service B. Depending on the nature of the business, this could lead to significant expansion of sales channels and opportunities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Three_Other_EU_Regulations_You_Should_Know_Besides_the_DMA\"><\/span>Three Other EU Regulations You Should Know Besides the DMA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In this chapter, we introduce three EU regulations that are essential to know when expanding into the EU, in addition to the Digital Markets Act (DMA).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Data_Act_DA\"><\/span>Data Act (DA)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The European Data Act (DA) is a legislative proposal announced by the European Commission in March 2022 (Gregorian calendar year), as part of the European Data Strategy proposed in 2020 with the strategic objective of creating a system that allows companies within the EU to share data. It was created with the aim of changing the current situation where 80% of industrial data is not being effectively utilized, by enabling more data to be used across society.<\/p>\n\n\n\n<p>By providing an environment where data can be reused, the Data Act aims to reduce the digital divide, and strengthen the relationships between consumers, businesses, and governments. The enactment of the Data Act is expected to boost the GDP by 270 billion euros by 2028.<\/p>\n\n\n\n<p>Reference: <a href=\"https:\/\/digital-strategy.ec.europa.eu\/en\/policies\/data-act\" target=\"_blank\" rel=\"noreferrer noopener\">Data Act[ja]<\/a>\uff5cEuropean Commission<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Digital_Services_Act_DSA\"><\/span>Digital Services Act (DSA)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Digital Services Act (DSA) is an EU regulation based on the principle that &#8220;what is illegal offline should also be illegal online,&#8221; designed to protect users from illegal goods, services, and content online.<\/p>\n\n\n\n<p>The DSA applies to companies that provide large online platforms, search engines, hosting services, etc., and requires them to publish information about their monthly active users in the EU every six months.<\/p>\n\n\n\n<p>The objectives of the DSA include enhancing democratic governance and oversight of system platforms and reducing systemic risks such as manipulation and misinformation.<\/p>\n\n\n\n<p>Reference: <a href=\"https:\/\/commission.europa.eu\/strategy-and-policy\/priorities-2019-2024\/europe-fit-digital-age\/digital-services-act_en\" target=\"_blank\" rel=\"noreferrer noopener\">The Digital Services Act[ja]<\/a>\uff5cEuropean Commission<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Digital_Governance_Act_DGA\"><\/span>Digital Governance Act (DGA)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Digital Governance Act (DGA) is a law aimed at eliminating data monopolies by specific companies and promoting data sharing across all EU member states. Like the Data Act (DA), it is legislation enacted in conjunction with the &#8220;European Data Strategy.&#8221; Sharing data such as health, traffic, and environmental data enables the provision of high-quality healthcare, alleviation of traffic congestion, reduction of CO2 emissions, and rapid response to emergencies such as floods and wildfires.<\/p>\n\n\n\n<p>For businesses, the DGA will reduce the costs associated with acquiring, integrating, and processing data, lower barriers to market entry, and shorten the time to market for new services. The goal is to foster innovation and create new employment opportunities within the EU.<\/p>\n\n\n\n<p>Reference: <a href=\"https:\/\/digital-strategy.ec.europa.eu\/en\/policies\/data-governance-act\" target=\"_blank\" rel=\"noreferrer noopener\">European Data Governance Act[ja]<\/a>\uff5cEuropean Commission<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Summary_Understanding_EU_Regulations_is_Essential_for_Business_Expansion_into_the_EU\"><\/span>Summary: Understanding EU Regulations is Essential for Business Expansion into the EU<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/monolith.law\/wp-content\/uploads\/2023\/12\/book-in-library-with-open-textbook-1024x683.jpg\" alt=\"Image of a book\" class=\"wp-image-63774\" \/><\/figure>\n\n\n\n<p>The Digital Markets Act (DMA) is an EU law that prohibits the monopolization of services on platforms by the Big Tech 5 companies and gatekeepers. While the impact of the DMA on Japan may not be significant, changes in regulations and discipline among global Big Tech companies could not leave Japan unaffected.<\/p>\n\n\n\n<p>In addition to the DMA, there are many other legal regulations in the EU&#8217;s digital market, and it is crucial for companies planning to enter the EU market to pay close attention to the trends in EU regulations. For advice on digital market regulations in the EU, we recommend consulting with attorneys who are knowledgeable in international legal affairs and the digital market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Guidance_on_Measures_by_Our_Firm\"><\/span>Guidance on Measures by Our Firm<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Monolith Law Office is a legal practice with extensive experience in IT, particularly in both the internet and legal fields. In recent years, global business has been expanding increasingly, and the need for legal checks by specialists is growing more than ever. Our firm provides solutions related to international legal affairs.<\/p>\n\n\n\n<p>Areas of practice at Monolith Law Office: <a href=\"https:\/\/monolith.law\/global-jpn2fgn\" target=\"_blank\" rel=\"noreferrer noopener\">International Legal Affairs &amp; Overseas Business[ja]<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The &#8220;Digital Markets Act (DMA)&#8221; is a law enacted by the European Union (EU) in 2023 with the aim of ensuring fairness in the EU&#8217;s digital markets. Japanese companies looking to expan [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":62102,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[24,29],"acf":[],"_links":{"self":[{"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/posts\/61911"}],"collection":[{"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/comments?post=61911"}],"version-history":[{"count":3,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/posts\/61911\/revisions"}],"predecessor-version":[{"id":62104,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/posts\/61911\/revisions\/62104"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/media\/62102"}],"wp:attachment":[{"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/media?parent=61911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/categories?post=61911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/tags?post=61911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}