DMA: heated trilogue negotiations concluded with partial interoperability gains

On Thursday March 24th the trilogue negotiators concluded discussions, dramatic at times, over the Digital Markets Act. The compromise includes some gains on interoperability, a potential changemaker in the online intermediation. What to expect? Where not to hold your breath? We parse out the practical consequences of the trilogue outcome on interoperability.

Winding road to the final compromise

Interoperability has been a point of contention since the European Commission published their first draft in December 2020. The EC drafted it narrowly, obligating gatekeepers to offer interoperability to the so-called ancillary services, like payment or identification services, that wish to operate within closed ecosystems. IMCO Rapporteur MEP Andreas Schwab followed this approach in his draft report. 

That didn’t go well with many MEPs who were disappointed with the fact that an opportunity to open up walled gardens of online intermediation had not been exploited. Many amendments and heated debates later, the final EP report provided that interconnection should be also possible between messaging apps and services (the so-called number independent interpersonal communication services) as well as social networks.

Since the Council’s approach was focused on refining the business-to-business side of interoperability, the trilogues didn’t show much promise in securing the extension of the EC’s scope. Somehow, under pressure of time the delegation of MEPs managed to negotiate some gains that keep the spirit if not the letter of the EP mandate.

Basic rules of becoming interoperable under DMA

As originally devised, the final DMA compromise envisions that only services designated as gatekeepers will be obliged to create conditions for interoperability with other services. This possibility will be, however, accessible on request – meaning that there won’t be any obligation to make a given service permanently and publicly accessible. A gatekeeper will have 3 months to “render requested basic functionalities operational”. 

Contrary to the original proposal by the European Commission, the compromise includes a definition of the functionality enabling opening digital ecosystems that so far have been closed: 

‘Interoperability’ means the ability to exchange information and mutually use the information which has been exchanged through interfaces or other solutions, so that all elements of hardware or software work with other hardware and software and with users in all the ways in which they are intended to function.

The definition is pretty straightforward and covers potential applications of frictionless communication exchange broadly, relating to both hardware and software. It refers to both the provisions already outlined by the European Commission in the original draft and to those worked out during the trilogues. The latter, as explained below in more detail, is an improvement as it encompasses some services that are then accessible to individual users and groups of individuals (the so-called end users).

End users will be able to freely decide whether they want to make use of the interconnected services or rather stay with the provider they had originally chosen. A service that wants to connect with a gatekeeper will need to do so within the same level of security. This means that if a gatekeeper offers end-to-end encryption, a connecting service will also need to provide it.

Messaging

End-to-end text messaging between two end users will be one of the basic functionalities that will become interoperable on request. Within two years after designation, the gatekeeper will also need to make available text messaging within groups of individual users. 

Similarly, sharing of images, voice messages and video attachments between two individuals will be the key available function that, after two years from becoming a gatekeeper, will need to be extended to groups.  

Calling

Voice and video calls will not be immediately available after gatekeepers are designated. They will have 4 years to create technical and operational conditions to make end-to-end video or voice calls available between two individuals and groups. 

Social networking? Maybe…

Social networking should also be one of the functionalities that gatekeepers should make interoperable, but the negotiators were not keen on agreeing to proposals made by the European Parliament team. The obligation for gatekeepers who offer social networking services did not make it into the final text. 

Fortunately, the DMA has a revision clause that binds the European Commission to evaluate the regulation and report to the European Parliament and the Council of the EU. The negotiators agreed to include an assessment if social networking services should be included in the scope of interoperability provisions in the revision clause. So there is no promise, but at least the EC has to look into the issue again and produce some evidence for – or against – extending the scope. 

The art of war compromise

The negotiations over interoperability were indeed dramatic. Apparently the French Presidency was unsure of its mandate from the Council to negotiate extended interoperability provisions and hesitated to negotiate beyond what the Council had included in their draft. Even worse, the European Commission authored a non-paper full of simplified claims pointing at how interoperability is not a feasible solution either for messaging or social networking.

“With the French Presidential elections looming, the incentive to wrap up what is possible to wrap up became greater. This was the chance for the Parliamentary negotiators to defend the mandate bestowed on them by the EP. “

Fortunately for the DMA, the negotiations over DSA were dragging. It became apparent that despite bold promises to deliver the outcome on the two regulations, the French Presidency won’t be able to assign two successes to its account. With the French Presidential elections looming, the incentive to wrap up what is possible to wrap up became greater. This was the chance for the Parliamentary negotiators to defend the mandate bestowed on them by the EP. 

Hence the result that goes along the demarcation line between what the EP wanted and what the Council agreed to give. Yes, end users will enjoy more interconnectivity, but only if service providers request it from the gatekeepers. Yes, private one-on-one messaging will be available first via text and sharing of images, audio and video attachments, but groups will need to wait two years to benefit from that. Yes, calling and video calling others will be possible but within 4 years. Yes, social networking could become interoperable but only if the European Commission sees it as necessary to ensure contestability – and that the soonest 3 years after the regulation enters into force. 

No doubt, the EP delegation fought hard and used available opportunities to secure what they could regarding interoperability. Ideally it would be better and extended to social networking but considering the pressure from the Council and the lobbying of the Big Tech on the issue, we couldn’t realistically count on more.

Stay tuned for the analysis of other provisions of the Digital Markets Act as adopted by the trilogues negotiators!