EU’s Digital Markets Act creates opportunities for Venture Capital & PE firms 

February, 2023 - Shoosmiths LLP

An analyst estimates that the market value in 2023 for digital advertising will be US$701 billion. The EU’s Digital Markets Act (DMA) is a legislative competition law 'key' to 'unlocking' the big-data relating to digital advertising held in the ‘safe’ owned by BigTech.

Advertising agencies are potentially one class of beneficiary (see link for article - The Digital Markets Act - Strategy reboot for online advertising).

The broader impact of the DMA on the technology driven multi-layered business environment of digital advertising is an opportunity for venture capital (VC) and private equity (PE) to stimulate market change through investment in existing players, or in those wishing to create a new role in the market.

The (digital) advertising market is largely unconsolidated and arguably ripe for a buy-and-build strategy. VC funding and PE investment could benefit from the DMA stimulus to help the smaller players grow, develop new products and create new market opportunities.

The DMA is designed to release the potential value of the digital information held by BigTech. However, BigTech can be expected to resist the encroachment on its incumbent business model. Key to valuing the investment opportunities are determining what new data a market player should be able to obtain from BigTech pursuant to the DMA and the process and timeline to receive the data.



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