The Digital Markets Act is a comprehensive regulation that aims to foster fair competition and address the dominance of large tech companies’ digital platforms. The law applies to designated gatekeeper companies’ platforms, such as online marketplaces and search engines, that have a significant impact on the European market. By helping to ensure a more level playing field, the DMA law provides startups and SMEs with better opportunities to compete and monetize their offerings.
How can you leverage the new rules brought by the DMA privacy law to your advantage as a startup or SME? Keep on reading to find out.
Embrace transparency to build trust
Transparency is a core requirement of the Digital Markets Act, and is also the cornerstone of successful monetization strategies in business online. As a startup or SME you can leverage the DMA to enhance transparency and build trust with your customers.
By clearly communicating your data handling practices, privacy policies, and consent mechanisms —and ensuring you use simple, clear language for the average user— you demonstrate a commitment to respecting consumers and protecting user privacy. This fosters trust, which in turn leads to stronger customer loyalty, higher engagement over time, and increased monetization opportunities.
Creating transparency with the DMA law in practice:
- Clearly communicate pricing and any fees associated with your services (including when there are changes)
- Provide transparent information about your business practices and policies
- Publish customer reviews and testimonials to showcase social proof
- Potentially provide multiple product or service tiers that customers can grow into, as they may not need a “premium” offering right away
- Offer a money-back guarantee or a free trial to reduce risk for potential customers
Example of how to be transparent about data use and build trust:
Let’s use the case of a startup offering a mobile app. By implementing clear and concise privacy notices, providing granular control over data sharing, and obtaining explicit consent for targeted advertising, the startup can establish itself as a trustworthy brand in the eyes of its users.
Explore collaborative business models
In the era of the Digital Markets Act, you can harness the power of collaborative business models to unlock new monetization avenues. Partnering with other companies, both within and outside your industry, enables you to tap into larger customer bases, enrich product or service offerings, and diversify your revenue streams.
By leveraging APIs and data-sharing agreements in compliance with the Digital Markets Act, you can also create innovative solutions and capture new market segments.
Developing collaboration via DMA compliance in practice:
- Partner with other complementary startups or established businesses to create joint offerings or cross-promotions
- Consider forming strategic alliances or collaborations with industry influencers or thought leaders
- Explore co-marketing opportunities to reach a wider audience and share resources
Example of how to collaborate to grow opportunities:
Imagine a food delivery startup collaborating with a local restaurant review platform. By sharing data and integrating their services, the startup can offer personalized recommendations to users, while the review platform gains increased visibility and user engagement. This mutually beneficial partnership opens up new monetization opportunities for both parties.
Harness the potential of data-driven insights
Data is the lifeblood of the digital economy, and as startups or small businesses you’re sitting on a goldmine of valuable user data. The Digital Markets Act emphasizes the importance of data access and portability, helping to level the playing field for smaller players.
By leveraging data analytics and insights, you can make more informed decisions to optimize your monetization strategies. Understanding user behavior, preferences, and trends enables you to tailor your offerings, improve customer experiences, and drive higher conversions.
Increasing customer visibility with data analytics in practice:
- Collect and analyze customer data to understand their preferences, behavior, and needs
- Use data to personalize and optimize your offerings, pricing, and marketing strategies
- Leverage data to identify new revenue streams or areas for business growth
- Consider offering data analytics or insights as a separate service to generate additional revenue
Example of how to use data to increase sales:
A fashion ecommerce startup can analyze customer browsing patterns and frequency, and purchase history to offer personalized recommendations and targeted promotions. By leveraging data-driven insights, the startup can increase cross-selling opportunities, boost customer satisfaction, and ultimately drive revenue growth.
Stay agile and innovate
Startups and SMEs must remain agile and embrace innovation to stay ahead of the competition, even more so than well-known or established brands. Fortunately, smaller companies are often more agile than bigger ones, which, having gained success and market dominance, may focus less on innovation and getting ahead of changing trends.
The Digital Markets Act encourages innovation by promoting interoperability and helping to ensure fair access to essential digital platforms and services. By continuously exploring emerging technologies, experimenting with new business models, and adapting to or getting out ahead of market trends, startups can seize monetization opportunities that others might overlook. Never ignore the opportunities of first-mover advantage.
Continuous innovation in practice:
- Continuously monitor market trends and customer needs to identify new monetization opportunities, including outside the usual channels, which may not pick up on more niche or “left field” developments
- Experiment with different pricing models, such as freemium, tiered pricing, or subscription-based models
- Regularly update and improve your products or services based on customer feedback, but be sure to continue to be the driver of your own strategy
- Stay ahead of competitors by investing in research and development to introduce new features or offerings, also test early and often to find true potential
Example of how to explore technology to seize monetization opportunities under the DMA:
Consider a software-as-a-service (SaaS) startup that offers project management tools. By integrating with popular collaboration platforms and leveraging emerging technologies like artificial intelligence, the startup can enhance its offerings, attract new customers, and position itself as a leader in its market segment.
Final words on leveraging the Digital Markets Act for small business monetization
By embracing transparency, exploring collaborative business models, harnessing data-driven insights, and staying agile, you can unlock the full potential of your venture.
The countdown to get ready for the Digital Markets Act is on. Even though DMA privacy compliance may seem challenging, this regulation is meant to be an ally to small businesses.
To start, it’s essential to understand the data your organization collects, where and how it’s obtained, and who it’s shared with. Review your internal policies regarding data handling, consent acquisition, and data usage, including third-party sharing.
Get ready for DMA today
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Frequently Asked Questions
The DMA is a regulation that applies to large tech companies operating in the European Union. It aims to improve fairness, innovation, and foster competition. It requires increased transparency, data sharing, and platform interoperability. It also increases user choice and data privacy.
Six companies have been designated as gatekeepers, with specific obligations under the law. Third-party companies that use the gatekeepers’ platforms and services will be required to meet certain compliance requirements as well to be able to continue to do business in the gatekeepers’ digital ecosystem.
The DMA officially came into force November 1, 2022. Most of its rules were active by May 2023, and the gatekeepers were designated September 6, 2023. The gatekeepers have until March 6, 2024 to comply with the DMA.
The DMA and DSA apply to companies doing business in the European Union, European Economic Area and United Kingdom, and to consumers residing there.
The DMA applies to companies that operate large online platforms meeting specific criteria, such as having a significant impact on digital markets, acting as intermediaries between businesses and users, and enjoying a durable position of market power with significant influence over innovation. These platforms have been designated as “gatekeepers” and will be subject to enhanced regulatory obligations and scrutiny under the DMA.
The six gatekeepers designated by the European Commission to date are:
- Alphabet (owner of Google and Android)
- ByteDance (owner of TikTok)
- Meta (owner of Facebook, Instagram, WhatsApp, and others)
Although the DMA applies to these gatekeepers, smaller businesses should also be aware of and understand the law, as it’ll directly impact how they use the large online platforms and services owned by gatekeepers. Business owners will be responsible for following the compliance rules imposed by digital services such as Google and Amazon.
The DMA largely focuses on fostering fairer, more transparent, and more competitive digital markets, in addition to enhancing consumers’ data privacy. The big goal is to enable smaller players to grow and innovate to compete with the big tech platforms, and to prevent the gatekeepers from using their power and reach to stifle the operations and growth of smaller companies.
The companies designated as gatekeepers by the European Commission to date are:
- Alphabet (owner of Google and Android)
- ByteDance (owner of TikTok)
- Meta (owner of Facebook, Instagram, WhatsApp, and others)
These are identified as services run by the gatekeepers that are integral to digital business operations. They include online search engines, operating systems, web browsers, voice assistants, online social networks, video sharing platforms, and more. To date 22 core platform services (CPS) have been identified under the DMA:
- 6 intermediary platforms (Amazon Marketplace, Google Maps, Google Play, Google Shopping, iOS App Store, Meta Marketplace)
- 4 social networks (Facebook, Instagram, LinkedIn, TikTok)
- 3 online advertising services (Amazon, Google, and Meta)
- 3 most popular operating systems (Google Android, iOS, Windows PC OS)
- 2 large communication services (Facebook Messenger and WhatsApp)
- 2 web browsers (Chrome and Safari)
- 1 search engine (Google)
- 1 video sharing platform (YouTube)
The main obligations of the DMA on gatekeepers are to:
- eliminate unfair or anti-competitive practices
- provide access to data gathered or generated on their platforms
- ensure interoperability
- prevent favoring their own or specific partners’ functionality or services
To comply with the DMA, gatekeepers will likely need to make substantial changes to their business models and operations to ensure compliance with the new obligations. Gatekeepers and businesses that rely on their platforms will likely need to make substantial investments in technology, staffing, and legal resources, potentially leading to increased operating costs.
The DMA’s provision for imposing fines on noncompliant platforms adds to the potential financial burden for gatekeepers. Loss of access to gatekeepers’ platforms for noncompliant third parties also presents a significant potential financial risk.
Over time the DMA should help foster innovation and growth among smaller companies as the business playing field is leveled.
Consumers are likely to see more competitive pricing and more innovation in technology platforms and services. It will become easier for them to switch providers and take their data with them, and they will have more control over the apps and services they use (e.g. uninstalling pre-installed software). They should also see enhanced data privacy and choices regarding use of their personal data.
Third parties accessing gatekeepers’ services will need to ensure they obtain valid user consent and signal that to the gatekeepers, e.g. via Google Consent Mode for Google’s platforms. A consent management platform enables companies to obtain prior consent for cookie and tracker usage, securely store the information, and signal it to gatekeepers. It is also available to data protection authorities in the event of an audit.
One of the core goals of the DMA is transparency, which is also at the heart of great customer experiences and building trust. This also improves user engagement and helps develop long-term customer relationships, which grows revenue. Provide clear information to users, request valid consent for access to their personal data, and show you respect their data privacy.
Additionally, the DMA requires the gatekeepers to provide access to data generated on or by their platforms, and transparency into operations like how algorithms work. Use this information to learn from data patterns and see what operational activities are successful and how to replicate them for your business.