Zalando & Delivery Hero fear for their growth

Brussels It is a big caliber with which the European Union is shooting at the digital corporations from the USA. With a new law, she wants to write new rules for a handful of corporations, tens of thousands of small businesses should benefit. For this purpose, behaviors with which the corporations have so far earned billions are to be banned.

The law called “Digital Markets Act” or “DMA” would break the market power of the big corporations in many areas. Small businesses selling on Amazon or programming apps for the iPhone could benefit greatly from the law.

In between there are a few companies that fear that they are wrongly counted among the big ones. Additional obligations would then also apply to them. In Germany, Zalando and Delivery Hero in particular see themselves affected. Together with other European companies, they wrote an open letter in October warning of the consequences of the law.

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If Zalando falls within the scope of the DMA, the company should not present the products it sells differently or more prominently than third-party products. Nor should it prevent these third-party providers from setting a link to another website where they might offer products cheaper than via Zalando.

As a gatekeeper, the company must not give preference to its own products

Even with Delivery Hero, the providers have not yet been able to set any links to other websites. The company has also announced that it will invest more in its own warehouses in the future. As a gatekeeper, it would then have to be careful not to prefer its own products on its platform.

Like Zalando, Delivery Hero advocates the DMA rules for the really big platforms. “It is important, however, that companies operating in what is already a dynamic and competitive environment are not restricted,” said a spokesman for Delivery Hero. “This would run the risk of the EU holding back its own innovations and digital progress.”

Do the most successful German platforms get into the line of fire even though only the really big ones are supposed to be hit? That depends on how the law ultimately defines who is a “gatekeeper”, a doorman that other companies can only get past if he behaves fairly. It is clear that they include Google, Apple, Facebook, Amazon and Microsoft. Who will still belong is open.

The EU member states have already unofficially agreed on a definition for it. There are thresholds above which a company is considered a gatekeeper. Zalando and Delivery Hero would not yet be included. If they keep growing, that could soon be the case.

The negotiations went faster than many expected. Some companies and associations seem to have expected more time to be able to express their criticism. In their letter, the companies demand that the number of their users be rated differently than the number of users on Google or Facebook.

Zalando

The online retailer Zalando could be affected by the new EU regulation in the future.

(Photo: dpa)

They point out that they only earn money with users who also buy something. However, every visitor to the site should be counted. “The DMA should in no way represent a regulatory obstacle to growth for European companies,” says a current statement from the European e-commerce association.

The European Parliament could agree on a draft law this Monday and thus also on the gatekeeper definition. If the law is to be limited to the big six corporations, then parliament would have to make this proposal now.

But it doesn’t look like that. In the responsible internal market committee, many MPs would rather expand the scope of the law than restrict it. “We don’t just want to hit the very big corporations, but as many platforms as possible that operate important gateways for customers and on which other companies can be dependent,” says SPD politician Evelyne Gebhardt.

And the Greens MP Anna Cavazzini says: “We Greens consider the fundamental expansion of the scope to be welcomed.” Behind this is the question of whether the EU should first take care of the large digital corporations or whether new rules are needed for large areas of the Internet economy .

Andreas Schwab (CDU), who leads the negotiations in parliament, wants a narrow gatekeeper definition. “The aim of the DMA was never to prevent e-commerce start-ups from growing, but to reopen those digital markets that are undeniable due to the anti-competitive behavior of gatekeepers,” he says.

So far, proceedings have taken many years

He receives support from the economist Achim Wambach: “Every regulation cuts into the freedom of companies. We should be careful that the DMA does not disrupt the dynamics in the digital economy, ”says Wambach. Even now there are already laws that can be used to stop misconduct by smaller companies. Wambach sees a need for action wherever companies have created entire ecosystems of services.

Because there they can use the market power in one business area to promote another business area. Last Wednesday’s verdict against Google again showed how this works: Because Google dominates the Internet search market, it can give its product comparison an advantage, which is detrimental to other comparison portals.

The EU court has made it clear that this practice is prohibited – twelve years after the EU Commission launched its investigation. With the DMA, such procedures would be unnecessary. That would be to the advantage of all companies that depend on their offers being found by Google – including Zalando and Delivery Hero.

More: How the EU is attacking the world’s most successful business models.

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