The Digital Markets Act was introduced in 2022 in the European Union as set rules for those called ‘gatekeepers’ in the digital world. They serve as important ‘gateways’ for businesses to reach their end users. The DMA aims to protect businesses and end users from potentially unfair conditions and ensure the transparency of important digital services such as apps and ads. The table below demonstrates the main criteria for who could be classified as a ‘gatekeeper’. The European Commission is an assessing body that determines which companies fall under the Act and are classified as ‘gatekeepers’. At this stage, only companies which have been designated as gatekeepers are subject to obligations. The presumed gatekeepers are able to appeal and provide arguments and evidence that, due to exceptional circumstances, they should not be considered as gatekeepers even though they meet all the criteria.
Source: Bloomberg, 2024
Source: European Commission, 2024
Since September 2023, seven organisations so far have been identified as gatekeepers by the EU Commission, which are:
Also designated under the DMA: Booking, designated by the Commission as a gatekeeper for its online intermediation service Booking.com on 13 May 2024.
Source: European Commission, 2024
The DMA will impose a variety of obligations that the gatekeepers will need to comply with and incorporate into their daily functions. One example of those obligations is to allow the end users to uninstall any pre-installed apps on their devices, or change their default settings on their operating systems, virtual assistants, or web browsers that steer them to the gatekeeper’s products and services and provide choice screens for key services. Another example is to allow business users to promote their offers and conclude contracts with their customers outside the gatekeeper’s platform (European Commission, 2024).
Booking.com is an Online Travel Agent (OTA), and its services are widely used by hoteliers to reach new and existing customers. The popular accommodation booking platform Booking.com has been identified as a gatekeeper after submitting its self-assessment on 1 March 2024, based on the DMA criteria. Following their designation (May 2024), Booking.com will need to comply with the regulation within six months and submit a detailed report outlining the DMA compliance. Here are some key requirements:
Our research shows that with For-Sight’s CRM and Marketing Platform, hotels can reduce reliance on OTA’s by, 19% on average. Booking.com will now be responsible for making your guest contact details visible to you. Many hotels didn’t have access to certain resources, but with the DMA controls, hotels in the European Union now do. To make the most of it, hoteliers need to have a”all data in one place” CRM platform where they can automatically create customer profiles based on the contact details and interactions with the hotel.
Initially, the DMA aimed to create a fairer digital marketplace by curbing the power of major online platforms like Google. However, according to D-EDGE findings (June 2024), the changes have had unintended consequences for hotels:
In the picture on the right, you can see search results in French Google for the Sheraton Grand Hotel & Spa in Edinburgh. We have highlighted the ‘sponsored’ content, which is visible first, including the official site as the top result. It shows that Sheraton Grand Hotel has paid for advertising, and Google should now favour the official sites (also by adding a blue badge) over OTAs like Booking. If Sheraton Grand Hotel didn’t do Google Ads, their results would appear first AFTER all the sponsored sites; it could appear, for instance, as number ten in total on the list, meaning that it most likely would be invisible to the customer.
We anticipate further changes due to the DMA regulations and will keep a close watch to update our customers accordingly.
The UK is following the EU’s example of the Digital Markets Act and planning to implement its own Digital Markets Competition and Consumers Act (DMCC), which has received Royal Assent.
Similar to the DMA, the affected companies (with strategic market status) will be chosen based on set criteria and by the Competition and Markets Authority. In the case that companies don’t comply within a set timeframe, they could be fined millions of pounds. The DMA enforces the same rules for all gatekeepers, while the DMCCA allows the Digitak Markets Unit (DMU) to create specific rules for each firm. This flexibility may lead to more targeted requirements, but could also slow down the process and make it more open to challenges (Osborne Clarke, 2024). Organisations are yet to be identified under the new Digital Markets Competition and Consumers Act.
Want to learn more about the DMA and DMCC? We will organise a webinar for hoteliers to dive deep into the subject. The dates will be announced soon. Want to be updated on the webinar dates and times? Sign up for our newsletter today!