What the DMA means for advertising services

The European Union has named the companies it believes to be “gatekeepers” under the new Digital Markets Act and has a special advertising services designation for Google, Amazon, and Meta. 

A total of six companies have been designated gatekeepers: 

• Alphabet
• Amazon
• Apple
• ByteDance
• Meta
• Microsoft

Why the Digital Markets Act matters

The EU’s new competition rules apply only to the very biggest companies that form “gatekeepers” between other businesses and the end consumer. While the same companies come up across different core platform services covered by the new rules and have a presence across many marketing-adjacent internet activities, direct advertising services are about the flow of media. 

Recent global forecasts from WARC suggest that gatekeepers Alphabet, Amazon and Meta (along with Chinese titans Alibaba and ByteDance, owner of TikTok) are set to hoover up more than half of all global advertising spending in the coming year and next. These new rules, therefore, place new responsibilities on the firms central to the soon-to-be $1 trillion advertising market.

What it means

The new rules are, as is typical of the EU, complex and unwieldy, but there are some incredibly powerful provisions that will affect how the general market will interact with gatekeepers after the deadline for compliance in March 2024. 

The penalties are tough: “In case a gatekeeper does not comply with the obligations laid out in the DMA, the Commission can impose fines up to 10% of the company's total worldwide turnover, which can go up to 20% in case of repeated infringement,” the bloc explains.

Access to data

For advertising services, this new provision will be key to the new law’s aim to bring more transparency to the market. Gatekeepers will have to provide advertisers with performance measurement tools as well as raw data to carry out their own independent verification. 

This also applies to publishers, who are also able to find out about the remuneration (including any deductions and fees), the prices paid by the advertiser and the metrics that the gatekeeper uses to calculate remunerations. 

Early movers

TikTok was one of the first to adapt with a proposal in August to strip the app experience of its algorithm should a user not consent to activity tracking. Expect more such adaptations (or options for adaptation) in future. 

To find out more on the Digital Markets Act, check out: 

• How the Digital Markets Act will impact advertisers
• EU Parliament approves major new rules: DSA/DMA
• The expected effects of the Digital Markets Act

Sourced from the EU, The Verge, WARC