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Online platforms, gatekeepers and the EU Digital Markets Act – new European Regulations in view for the maritime industry

By Sybille Rexer, Counsel, Arnecke Sibeth Dabelstein, IUMI Professional Partner, www.asd-law.com, and Member of the IUMI Data & Digitalization Forum

The transition to digitalisation and automation is accelerating in the maritime industry. Digital technologies and solutions are being used to increase competitiveness and improve operational efficiency.[1]Intelligent shipping containers, maritime logistics solutions as well as seaport innovations are to a very large extent dependent on data and a functional digital environment. Maritime logistics companies have thus recognised that a sustainable competitive advantage depends on the effective use of existing information and the collection of data throughout the supply chain, and data sharing has a key role to play in the effective management of maritime supply chains.[2] This data exchange can inter alia reduce costs and shorten delivery times.

The maritime logistics sector is already using the data through digital technologies, such as Automatic Identification System (AIS), which sends the ship-specific data such as navigation data to the other AIS receiving device, improving the safety and guidance of vessel traffic.[3] Governments also have interest regarding digitalisation in the maritime sector. In 2017, the German Federal Ministry for Economic Affairs and Energy and the German Federal Ministry of Transport and Digital Infrastructure signed the "Joint Declaration on digitization within the maritime industry."  As a result, any development in the field of digitalisation also has an impact across the maritime sector.

On 15 December 2020, the European Commission presented the Digital Markets Act (DMA), which is one of two important legislative proposals after the Data Protection Agreement (GDPR), to reform the digital economy. While the Digital Services Act (DSA) aims to create a secure digital space, the DMA on which this article focusses specifically aims to promote fairness and competitiveness in digital markets.

The DMA specifically targets large technology platforms, so-called gatekeepers (Gatekeeper), which act as intermediaries between companies and their end customers. Although it has not yet been determined which companies will be named as Gatekeepers, Amazon, Apple, Facebook, Google, Microsoft and companies with comparable market position in their special area are likely to be identified as the main characters of the DMA. Due to their dominant position, these Gatekeepers exercise considerable control over access to digital markets, on which numerous companies rely. In order to avoid abuse of this position and thereby create fairer and more open markets for all users, the DMA seeks to create an EU-wide, harmonised set of regulations and allow smaller competitors to access to the Gatekeepers’ data under certain circumstances.

According to Art. 3 Par. 1 of the DMA, a company qualifies as a Gatekeeper if it has a significant impact on the internal market, operates a core platform service which serves as an important gateway for business users to reach end users, enjoys an entrenched and durable position in its operations or it is foreseeable that it will enjoy such a position in the near future. When these criteria are met in detail is determined by Art. 3 Par. 2 of the DMA, which contains detailed information on annual turnover, market value and the minimum number of active users.

If a platform operator reaches these thresholds, it is obligated to notify the Commission, which then designates the operator as a Gatekeeper pursuant to Art. 3 Par. 4 of the DMA. It should be noted that according to Art. 3 Par. 6 of the DMA, the Commission may designate a platform as a Gatekeeper, taking into account structural market characteristics, even if not all of the above criteria are met.

If such a designation is made by the Commission, the DMA imposes several prohibitions and restrictions on the Gatekeeper aimed at creating a fair business environment for users.

Gatekeepers are particularly obliged to allow third parties to collaborate with their services under certain conditions and to allow commercial users to access the data they generate when using the platform. They must also allow end users to un-install pre-installed software and applications on its core platform service, and they must provide companies that advertise on their platform with the tools and information they need to conduct their own independent review of their advertising.

In addition, Gatekeepers are prohibited from, among other things, aggregating data collected on the core platform with data from their other services without effective consent, or forcibly registering end users with those services in order to aggregate data and rank services and products offered by themselves in preference to those offered by third parties.

If the measures taken by Gatekeeper do not ensure effective compliance with these obligations, the Commission may establish its own measures, which the Gatekeeper must implement. Enforcement of the DMA is thus undertaken by the EU at the supranational level, rather than by national authorities.

In the event of a breach of the DMA, the Commission can impose a fine of up to 10% of a company's total turnover in the preceding financial year according to Art. 26 Par. 1 of the DMA. In addition, Art. 27 Par. 1 of the DMA provides for the possibility of imposing periodic penalty payments of up to 5% of the average daily turnover in the preceding financial year per day. If a market investigation reveals that a Gatekeeper is in systemic breach of the obligations imposed on it, the Commission may impose behavioral or structural remedial measures on it that are proportionate and necessary to ensure compliance.

Thus, the DMA aims at preventing large companies from abusing their market power and allowing new players to enter the market.

The impact on the maritime industry may be important since digitalisation has long been part of daily practice such as the use of smart technology to connect with suppliers and freight forwarders in the hinterland. At the same time, it is to be expected that improving the way information is shared in global maritime shipping will help improve maritime security, increase the efficiency of maritime transport and reduce the impact it has on the environment.[4] 

To name an example, it may be mentioned that DNV is building an industry platform in collaboration with Microsoft Azure to enable frictionless connections between different industry partners, domain experts and data scientists. In doing so, DNV is not looking for its own data, but to prepare combined data for analytics and benchmarking accordingly.[5] This may be viewed as an example of the influences the DMA may have on the maritime industry, as the Microsoft Azure is a platform of Microsoft, which is also most likely to be a Gatekeeper. Thus, it has to be assumed that Microsoft would have to allow DNV to collaborate with their services and to allow to access to the data they generate when using the platform. Otherwise, it has to be considered it would be a violation of the DMA and the Commission could fine Microsoft.

The DMA is aiming at providing a fair, transparent, and predictable business environment for smaller companies and traders on online platforms. Consequently, the smaller companies shall also have a chance against the Gatekeepers to grow. By entering into force of the DMA it would lead to competition and force the smaller companies as well as the Gatekeepers to be more and more innovative and render better services. This would allow consumers to choose better services and be more likely to switch providers, have direct access to services and fair prices.[6] As a result of this competition, new, better and cheaper technologies for data usage in the maritime industry may also emerge. With these new technologies, logistics companies may have the opportunity to use data to strengthen relationships with business customers and consumers. By leveraging vessel and navigation data with newer and better technologies, a safer environment for vessels shall be ensured.

Since entering into force of the DMA would in respect of the maritime industry encourage new data solutions and services with fair prices, it may be expected that in time expenses would decrease. The DMA may therefore be considered for the maritime industry as a big step into more numerous and fair data solutions and an opportunity to grow.

 

 

 

[1] https://www.dnv.com/maritime/insights/topics/digitalization-in-the-maritime-industry/index.html

[2] https://www.itf-oecd.org/sites/default/files/docs/information-sharing-maritime-logistics.pdf

[3] https://de.wikipedia.org/wiki/Automatic_Identification_System

[4] Joint Declaration on digitisation within the maritime industry

[5] https://www.thb.info/rubriken/detail/news/daten-plattform-fuer-maritime-branche.html

[6] https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-and-open-digital-markets_de#documents

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