How Will The Digital Markets Act Impact Unified Comms?
The Digital Markets Act (DMA), which was signed into law in 2022, will have a significant impact on the field of unified communications.
This legislation, which aims to regulate the behavior of “dominant online platforms”, has brought about a number of potential changes that have affected the way that companies and other digital industries operate.
With a date of 2nd May 2023 as the target to come into enforcement, what does it mean for unified comms?
Changes enforced by the Digital Markets Act
One of the most significant changes brought about by the DMA is the creation of a new regulatory body, known as the Digital Markets Unit (DMU).
The DMU is responsible for enforcing the provisions of the act, which include a set of rules designed to promote competition and ensure that dominant online platforms do not abuse their power.
One of the key provisions of the DMA is the requirement for dominant online platforms to be more transparent about their operations.
This means that companies like Google and Facebook must now disclose more information about their algorithms and the way that they collect and use data.
In turn, this has made it easier for smaller competitors to enter the market, as they are now better able to understand the practices of the dominant players.
This doesn’t mean that smaller companies immediately start gaining customers from the likes of Google and Facebook. But, it’s a small step in the right direction.
Figures included in the Digital Markets Act
Specific to unified comms, vendors that operate on a large enough scale may be hit with changes in their pricing and go-to-market strategies.
Based on the guidelines, Microsoft Teams is the likely only collaboration platform to meet this criterion (as of January 2023).
According to the European Commission’s guidance, there are three main criteria that bring a company in the scope of the DMA:
- A size that impacts the internal market: when the company achieves a certain annual turnover in the European Economic Area (EEA) and it provides a core platform service in at least three EU Member States;
- The control of an important gateway for business users towards final consumers: when the company 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;
- An entrenched and durable position: in the case the company met the second criterion during the last three years.
While we know that Microsoft has 280 million monthly active users, Microsoft doesn’t currently disclose the active users per continent (or any region).
We also know that Zoom passed 300 million monthly meeting participants at its peak during the coronavirus pandemic. We don’t know how many of those are/were in the EU region, either. And we also know that this has calmed down since.
It will be important to understand what the DMA classifies as a core platform service before unified comms vendors start to act.
Could this just be meetings and calls? Is it simply the act of firing up the app every day?
Like the blurry line between what is an active user and what is simply a provisioned license, the unified comms market needs further elaboration before it likely can be impacted by the DMA.
Here is Microsoft’s definition:
How the DMA will impact unified comms data
An important change brought about by the Digital Markets Act is the introduction of new rules governing the use of data.
The act requires dominant online platforms to allow users to easily transfer their data to other providers, which will make it easier for customers to switch between different services.
Traditionally, migrating collaboration platforms has been hard to impossible, putting IT and procurement managers off the notion altogether.
- How to Migrate from Microsoft Teams to Zoom
- How To Migrate From Slack To Microsoft Teams
- How To Migrate From Microsoft Teams To Webex
The DMU suggests that general online market competition has increased, as companies must now work harder to retain their customers. But can the same be said for competition in the unified comms market?
The Gartner Magic Quadrant for UCaaS showcases the same leaders this year as it did last:
Is this a show that the DMA is needed more than ever? Or has market consolidation led to this leadership state, and is providing a better choice for users of unified comms and collaboration technology?
As unified comms companies react to the Digital Markets Act, will there be any changes to propositions?
We asked three business comms experts for their opinions…
Mehmet Hussein, Director of Solutions Engineering at Bandwidth, says:
“Every now and then, monopolies need to be taken back a peg or two and it would seem the DMA is the most recent attempt. One of the 8 CPSs being targeted is “Communications Platforms” – I can see this having a meaningful effect on the UC space. In the shorter term, the drive to allow cross-platform messaging interoperability will create market opportunity. In the longer term, the aspirations of many UC vendors to create their own platform and ecosystem may have just been slightly curtailed.”
CEO of Mio, Tom Hadfield, says:
“The European Parliament’s commitment to messaging interoperability has ramifications far beyond Europe. The DMA requires key players in the collaboration industry, including Microsoft, to fully embrace interoperability. That’s good news for enterprise customers, and good news for end users.”
Margrethe Vestager, Commissioner for Competition and Executive Vice-President of the European Commission, says:
“The DMA will change the digital landscape profoundly. With it, the EU is taking a proactive approach to ensuring fair, transparent, and contestable digital markets. A small number of large companies hold significant market power in their hands. Gatekeepers enjoying an entrenched position in digital markets will have to show that they are competing fairly. We invite all potential gatekeepers, their competitors, or consumer organizations, to come and talk to us about how to best implement the DMA.”
The Digital Markets Act has also had an impact on the way that companies in the unified communications industry conduct their business.
For example, the act prohibits dominant online platforms from using their position to unfairly advantage their own services.
While Microsoft and Google hold an advantage of including Teams and Chat in their Microsoft 365 and Google Workspace packages, it means competing vendors like Cisco, Zoom, and Slack, are on the back foot.
Overall, the Digital Markets Act has brought about a number of important changes in online markets. But unified comms is yet to be impacted.
By promoting competition and fairness, the act has created a more level playing field and has made it easier for smaller companies to compete with the dominant players.
This has led to greater innovation and better services for customers, which is ultimately a positive development for the industry as a whole.
Will this be a good thing for unified comms too?
Read Next: Legislation Requiring Microsoft to Embrace Chat Interoperability Advances in the Senate