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Slovenia: Unveiling the DMA – Safeguarding Open Markets in the Digital Sphere and Its Impact on Slovenia

Slovenia: Unveiling the DMA – Safeguarding Open Markets in the Digital Sphere and Its Impact on Slovenia

Issue 10.7
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The initiation of the European Union’s Digital Markets Act (DMA) on May 2, 2023 marked a pivotal turning point in digital markets. Designed to counteract the monopoly-like tendencies of so-called “gatekeepers” – large online platforms wielding significant power – the DMA is revolutionizing the digital space. However, its implications extend beyond these giant companies, and it’s essential to examine the impact on smaller EU members like Slovenia.

Slovenia, a nation of just two million inhabitants, has a burgeoning digital scene that stands to benefit significantly from these new regulations. Despite its smaller digital market size than other EU nations, the DMA’s implications promise to reverberate throughout the country, from tech start-ups and SMEs to individual consumers.

What are “gatekeepers”? These powerful platforms substantially impact the internal market, functioning as essential business channels to reach end users. Their size and reach mean they often create a bottleneck in the digital sector, acting as private rule-makers. The DMA sets out to change this by instating an exhaustive list of dos and don’ts for these gatekeepers, encouraging proactive behaviors that make markets more open while discouraging unfair practices.

The DMA’s implications for Slovenia can be broadly classified into three categories: implications for businesses, consumers, and the economy. For businesses – particularly smaller companies and start-ups – the DMA could pave the way for enhanced competition and innovation. These businesses will benefit from a level playing field where they can compete more robustly with larger platforms. The new regulations will foster an environment of innovation and growth, allowing Slovenian firms to scale their operations within a unified framework at the EU level. Moreover, increased competition can result in better services, pushing Slovenian companies to strive for excellence, ultimately benefiting consumers. The DMA aims to prevent gatekeepers from engaging in anti-competitive practices for consumers. This means more choices and potentially better prices for Slovenian users of digital services. The DMA serves to break down existing barriers in the digital market, thereby sparking innovation that even Slovenian tech companies can leverage. The DMA’s provisions also mandate improved data privacy measures – a move that benefits Slovenian users. Gatekeepers will be required to offer more transparency in their data practices and give consumers more control over their data.

The DMA will also shape the broader Slovenian economy. The digital sector, which has become increasingly vital in recent years, will have the opportunity to grow and diversify. As digital services are cross-border by nature, the DMA can help reduce regulatory fragmentation for digital services, particularly regarding gatekeeper platforms. This, in turn, can lead to reduced compliance costs for companies operating in the internal market. Furthermore, the DMA empowers Slovenian businesses and consumers with the right to seek direct action for damages if they believe a gatekeeper’s non-compliance has harmed them. This provides an additional layer of security and recourse for addressing grievances.

The DMA’s future-proof design ensures its effectiveness in the face of a rapidly evolving digital sector. The Commission is empowered under the DMA to supplement the obligations applicable to gatekeepers based on a market investigation, ensuring that the same issues of fairness and contestability are addressed as gatekeepers and digital markets evolve.

The phased implementation of the DMA is now underway. The first wave of potential gatekeepers has been required to notify the Commission of their core platform services by July 3, 2023. Slovenia and the rest of the EU await the Commission to designate gatekeepers by September 6, 2023. Through the DMA, the EU seeks to ensure a level playing field in the digital market, and its implications on Slovenia’s digital practices are unfolding. As gatekeepers gear up to comply with the new regulations, the digital market landscape in Slovenia and across the EU is poised for a significant transformation. This pivotal moment offers a promising glimpse into the future of digital markets, fostering innovation and competition while keeping the digital giants in check.

In conclusion, Slovenia, as a smaller EU member with an evolving digital market, finds itself on the cusp of an era replete with opportunities and challenges. While fundamentally reshaping the broader European digital landscape, the DMA bears particular significance for Slovenia’s vibrant digital ecosystem. It empowers Slovenian businesses, safeguards consumers, and promises to spur economic growth. As the DMA unfolds, Slovenia’s digital market is poised to adapt and thrive, setting the stage for a digital revolution that could propel this small, innovative nation into the spotlight of Europe’s digital future.

By Uros Cop, Managing Partner, Law Firm Senica & Partners

This article was originally published in Issue 10.7 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here

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