Blog Q&A with an expert: Digital Markets Act ...

Q&A with an expert: Digital Markets Act and Digital Services Act

The Digital Markets Act (DMA) and Digital Services Act (DSA) are both due for enforcement in the first quarter of 2024, after a grace period of one year. We recently took a look at what these landmark pieces of legislation mean for the app advertising ecosystem and at what impacts they will have on mobile marketing. As a B2B company operating in the European Union, it’s essential that we comply with the regulations. We’re not only enthusiastic about ensuring our own compliance, we’re also dedicated to helping our clients and partners to get fully prepared for this next swathe of essential, privacy-centric industry developments.

Today, we’re sitting down with one of Adjust’s measurement experts, Director of CTV & New Channels, Gijsbert Pols, to answer some of the top questions and to clarify the most pressing points for our clients, partners, and friends in the industry.

What are the primary goals of these pieces of legislation?

First and foremost, they’re about limiting market monopolization and anti-competitive business practices while better protecting user and consumer rights in the online space. The DSA covers stricter controls on distribution of illegal content, better protection for children, protections from advertising based on factors like race, gender, ethnicity, enhanced regulations, and, broadly speaking, rights of users when it comes to data privacy. The DMA’s focus is on the designated gatekeepers via the creation of rules that prohibit them from, well, gatekeeping.

When do the Digital Markets Act and Digital Services act become effective?

Actually, the DMA has been in force since May 2, 2023, but we’re currently in a grace period, and the gatekeepers have until March 6, 2024 to be fully compliant. For the DSA, we’re also currently in a year-long grace period, which will come to an end on February 17, 2024.

Online platforms have been under obligation to publish their number of active users since February 17, 2023 (the law’s original enforcement date). Platform or search engines with more than 45 million active users (i.e. 10% of the current population of Europe), have been designated by the Commission as gatekeepers, and were given four months to comply with the DMA’s specific obligations for this designation, which include, for example, carrying out and providing the Commission with their first annual risk assessment. February, however, is when the law itself will be enforced in full.

Does Adjust fall under any of the definitions outlined by the DMA and DSA?

No, Adjust is neither a gatekeeper nor what’s referred to as a provider—a service, hosting service, or online platform. We are a data processor.

The new laws are specific in outlawing targeting by gatekeepers, what about providers, or the callback functionality of Adjust’s Audience Builder?

The DSA prohibits specific types of targeting under two articles that prohibit providers and online platforms from presenting ads to users based on targeting profiles that fall into the special categories of personal data, which—in line with GDPR—include ethnic origin, political opinions, religious beliefs, sexual orientation, health data and genetic data. While extremely important, businesses should already be separated from this form of targeting because it’s already illegal under GDPR.

It’s also prohibited for providers to target users with personalized ads based when they are aware (with reasonable certainty) that those users are minors. As with the special categories, this should be nothing new, as targeting of minors is already illegal in the EU under the GDPR.
The new legislation simply, and rightly, creates more onus and pressure to abide, which everyone should already be doing.

So, while the DSA does provide specific, and important, restrictions on targeting of minors or of any user on the basis of sensitive data, it doesn’t specifically prohibit any ad targeting technologies, meaning Adjust’s Audience Builder and its functionalities can still be used and will be unimpacted.

What does this mean for Google, Apple, and the industry at large?

Much of the goal of the DMA is to hinder anti-competitive business practices associated with gatekeepers like Google and Apple. One of the biggest changes and potential challenges, specifically for Apple, will be the likely requirement to allow third-party app stores to function on their platforms. This means that for the first time, users of iOS will be able to download apps from more than just the App Store and that Apple will be obligated to permit this.

It is likely that major players such as Meta and Microsoft will start offering their own mobile app stores and perhaps some major brands will do the same - gaming companies, for example, but also a company such as Nike. It will allow them to develop a more direct relationship with their users and make it easier to convert them for new apps.

For Google and Apple, this development comes with security risks. They can no longer gatekeep apps on Android and iOS, making sure mobile apps meet certain requirements before they can be published in their stores. Rather, they will likely monitor these apps in some way. Also, we are probably going to see changes to the way Google and Apple’s privacy policies are implemented, because a lot of them are implemented based on the idea that the Play Store and App Store are the exclusive gateway to Android and iOS.

What kind of an impact do you expect to see for mobile marketers and app developers?

The turn toward a privacy-centric mobile advertising ecosystem has been underway for years, with Europe standing as the most pronounced market for these developments currently. Starting with GDPR and extending through to the seismic shift brought about by Apple’s iOS 14.5 and App Tracking Transparency (ATT), Google’s impending Privacy Sandbox on Android will also serve to continue driving the industry toward a more consent-based and privacy-focused approach to measurement and targeting. It’s also worth noting that other regions and countries have followed in the EU’s slipstream by implementing similar regulations, like California’s CCPA or India’s DPDPA.

These laws further cement this direction, a move that is fully supported and embraced by Adjust. While changes around the types of data that can be accessed do bring new complexity to campaign analysis and targeting capacity, it is also a moment of opportunity, where new technologies can be leveraged to find and delight audiences more ethically and sustainably.

From seeking out new channels (like CTV and PC and Console) with highly relevant potential users to investing in new technologies and methodologies like media mix modeling, incrementality, and predictive analytics, there’s really nothing to lose and everything to gain.

I would say that there are the following points to make:

  • Mobile marketers should get creative about consent management, making sure that users trust their data with them. Adjust can support them doing this.
  • Mobile marketers - and generally app marketers - are well advised to diversify their campaign management. Marketing mobile apps on Connected TV (now a full-blown performance channel) is certainly an option and Adjust has all the integrations to make that happen. PC & Console is an option too and has the advantage that it can also lead to cross-device usage (i.e. users playing games or streaming or whatever on both their mobile devices and their laptops, which increases time spent with the app).

We’ll be keeping a close eye on the developments surrounding the DMA and DSA as enforcement comes into full swing in 2024. For more information on how Adjust can support in getting you prepared for any potential changes, get in touch with your contact person today or request a demo.

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