The European Union has identified 22 “gatekeeper” services operated by six major technology firms that will be subjected to new regulations under its latest initiative to regulate Big Tech. The forthcoming Digital Markets Act (DMA) will pertain to services provided by Alphabet, Amazon, Apple, Meta, Microsoft, and ByteDance, the parent company of TikTok.
Considered a complementary piece of legislation to the Digital Services Act (DSA), which enhances the responsibilities of tech companies regarding content on their platforms, the DMA aims to create a more equitable environment for both Big Tech and smaller competitors.
The companies designated as gatekeepers have a period of six months to adhere to the DMA’s requirements, which seek to enhance accessibility and compatibility of services across Europe, thereby presenting a significant challenge to their existing business models.
According to the DMA’s criteria, firms with over 45 million monthly active users and a market capitalization of €75 billion ($82 billion) qualify as gatekeepers providing essential platform services.
Entities categorized in this manner will be mandated to enable interoperability between their messaging applications and those of competitors, along with allowing users the option to select which applications are pre-installed on their devices.
Alphabet’s Google leads the list with the most services affected, including its Android operating system, Google Maps, and Google Search. Similarly, Meta’s platforms such as Facebook, Instagram, Marketplace, and WhatsApp are also recognized as gatekeepers.
Fines for companies failing to meet these stipulations could reach up to 10% of their annual global revenue for infractions of the DMA.
While gatekeepers can request interim relief to postpone the enforcement of these rules, doing so would require filing a legal action in the EU Court of Justice, according to a senior official from the Commission. “We haven’t seen anything like that so far,” the official noted.
In a related scenario, Zalando previously challenged the Commission in court following the rollout of the Digital Services Act in June.
EU industry chief Thierry Breton announced, “It’s D-Day for #DMA!” via X, formerly Twitter, stating that the most influential online companies will now adhere to EU regulations.
Responses from Tech Companies
A representative from Microsoft stated that the company accepts its gatekeeper designation, while spokespersons from Meta, Google, and Amazon indicated that they were in the process of evaluating their status.
In contrast, TikTok expressed strong disagreement, stating it was “disappointed that no market investigation was conducted prior to this decision” and is contemplating its options moving forward.
Apple’s spokesperson revealed concerns about the potential privacy and data security risks posed by the DMA, highlighting worries that the legislation could encourage the installation of apps from outside Apple’s App Store, a practice known as “side-loading”.
Stavroula Vryna, a partner at law firm Clifford Chance, remarked, “The Commission should balance the need to protect user security and privacy with the very real risk that gatekeeper app stores will use security and privacy as excuses to dilute compliance with their DMA obligations.”
The Commission exempted Alphabet’s Gmail, Microsoft’s Outlook, and Samsung’s browser after the companies provided satisfactory justifications indicating these services do not meet the gatekeeper criteria.
Additionally, the Commission has initiated four market investigations to further evaluate claims from Microsoft and Apple that certain core platforms, such as Bing, Edge, Microsoft Advertising, and Apple’s iMessage, do not qualify as gatekeepers.
An Apple spokesperson stated, “iMessage is designed and marketed for personal consumer communications, and we look forward to explaining to the commission why iMessage is outside the scope of the DMA.”
© Thomson Reuters 2023
