The Digital Markets Act and Digital Services Act: Impacts on mobile marketing
Designed to create a safer, fairer, and more transparent online environment, the European Commission’s Digital Markets Act and Digital Services Act are landmark pieces of legislation in the tech and online consumer privacy space.
The Digital Markets Act (DMA) addresses large online platforms or “gatekeepers” by aiming to ensure they behave in a fair way online and allow an even playing field for digital companies of all sizes. The Digital Services Act (DSA), on the other hand, aims to empower consumers by giving them more control over how, when, and from whom they receive targeted advertising. This applies, among many online businesses and intermediaries, to all app developers and marketers. Some of the most far-reaching rules, however, focus specifically on the gatekeepers, i.e. the platforms and search engines that reach at least 45 million users (10% of the EU population).
Although both acts are already in force, the DSA is not directly applicable across the EU until February 17, 2024, and the DMA is currently providing all identified gatekeepers with a grace period until March 2024 to comply. The first batch of these gatekeepers were officially designated on September 6, 2023, and include large scale tech companies like Google, Apple, ByteDance (TikTok), Meta, Microsoft, and Amazon. More might follow.
What is the Digital Markets Act and what are the European Commission designated gatekeepers?
Let’s first take a look at the DMA. This piece of legislation directly addresses what the European Union refers to as the anti-competitive nature of tech giants’ business operations. Via specific criteria, companies can be identified as gatekeepers, and will need to comply with certain rules.
A gatekeeper is defined as: a company that provides a core platform service to more than 45 million monthly active end users established or located in the EU and to more than 10,000 yearly active business users established in the EU.
Andreas Schwabb, a member of the European Parliament (MEP) leading on the Digital Markets Act stated, “The purpose…is that Europe gets the best companies and not just the biggest. This is why we need to focus on the legislation’s implementation. We need proper supervision to make sure that the regulatory dialogue works.”
For now, the biggest changes we can expect to see within the mobile context are around the likely addition of third-party app stores to gatekeepers’ devices. It’s already been suggested that Microsoft and Meta are preparing their own app stores, which could have a significant impact on mobile marketing and the availability of apps across devices. For Apple, this would be an enormous change, as it would mean they would have to allow third-party app stores to be available on their devices for the first time.
Additional regulations around data ownership and targeting/retargeting have already been in force in the EU since the rollout of GDPR, but the DMA makes things a lot clearer for gatekeepers. That being said, for gatekeepers, the legislation is at least somewhat open to interpretation, meaning the impacted gatekeepers will likely develop very different strategies to respond to and act in compliance with these changes from a legal perspective.
The Digital Services Act and enhanced user privacy
While the DMA addresses the regulation of gatekeepers and the suppression of anti-competitive business practices, the DSA swings the focus to users by aiming to make the internet a safer space for all. Via the enforcement of this legislation, users will be provided with more clarity around why specific content is being served to them, along with more decision making power regarding if and when they receive it at all.
Christel Schaldemose, a leading MEP on the Digital Services Act stated, “For too long tech giants have benefited from an absence of rules…Now rules and rights will be strengthened.”
Perhaps most importantly, targeted advertising of minors will be completely banned. For people of all ages, the use of sensitive data including sexual orientation, religion, or ethnicity, for advertising purposes, will face the same full ban regardless of user consent. These new rules also largely aim to protect people from illegal content or content considered harmful, while subsequently enabling enhanced protection around freedom of speech. The act will also work to ensure that products sold online meet the EU’s high standards. This should improve clarity around the origins or sellers and products advertised across platforms and channels and reduce the prevalence of fraudulent or misleading sellers.
The impact on mobile marketing and Adjust
Adjust is not a gatekeeper and no clients have been identified as such so far, meaning the impact on our business will mostly be from a development and reporting perspective. For example, when new app stores emerge, we’ll develop solutions to support them, but as all apps will still need to function on Android and iOS, this will largely be on the reporting side. We are watching development and adoption closely and will continue to do so following full enforcement in 2024.
Regarding the industry in a broader sense, the most significant change for mobile is that the targeting capabilities of gatekeepers will be reduced. We are currently in talks with our partners who have been designated as gatekeepers to ensure that all mutual practices around data are fully compliant.
In addition to the protection of minors and sensitive data under the DSA, the legislation is also tackling what is coined ‘surveillance capitalism,’ meaning our clients and our partners need to provide full transparency on their ad technologies. When you see, for example, an ad for a Mercedes Benz car in an app, that app needs to be able to explain why that ad was shown—at least to anyone within the EU. These sort of measures aren’t far removed from privacy changes implemented with iOS 17, which are also due for enforcement in Spring 2024.
While we can foresee some increased complexity around, for example, generating ad revenue, we fully support these practices and any developments that enhance privacy protection and transparency. As a Safe Harbour certified business, our products and ad practices comply with COPPA’s child-protection guidelines, meaning we already act in complete accordance with the protection of minors from targeted advertising.
As we embrace new technologies and a diversification of advertising channels, to spaces like CTV, PC and console, it’s essential that marketers stay in the loop of all technological and legislative changes. For more information on these developments and on our next-generation, privacy-centric measurement tools, get in touch with your Adjust contact person or request a demo.
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