AmazonMeta (Facebook and Instagram), viewAlphabet (Google), Microsoft (LinkedIn), and Bytedance (TikTok) are six major platforms that may be designated as gatekeepers. The Digital Markets Act (DMA) is a cornerstone of the European strategy to regulate anti-competitive practices by large tech companies and curb abuses of power. A first list published by the European Commission on Wednesday identifies six gatekeepers and a total of 22 services that must comply with the new rules, including LinkedIn, Instagram, WhatsApp, YouTube, Messenger, and the App Store, among others.
In crafting its list, Brussels applied two criteria from the regulations. The first considers size within the single market, requiring an annual EU turnover of at least 7.5 billion euros, a market value of at least 75 billion euros over the last three financial years or the most recent year, and operations in at least three Member States. The second criterion looks at market power, with more than 45 million monthly active end users in at least one of the ten core DMA services and more than 10,000 active users annually for the last three years. Core services include search engines, social networks, and operating systems.
iMessage and Bing
The identification of the six gatekeepers and the 22 services follows a 45-day review after Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft, and Samsung announced potential gatekeeper status on July 3. The Bing search engine, Edge, and Microsoft Publishing, along with three Microsoft services and Apple’s iMessage, have been excluded for now. The European Commission has launched four market studies to examine claims that some firms should not be gatekeepers even if they meet thresholds. A final decision is expected within five months at the latest.
Another investigation is underway with a 12-month deadline to assess whether Apple’s iPadOS should be designated a guardian despite not meeting all thresholds. The Administrator concluded that Gmail, Outlook.com, and Samsung Internet Browser meet the criteria for gatekeepers, but Alphabet, Microsoft, and Samsung presented arguments that these services cannot function as portals for related core platform services.
On September 14, 2022, EU officials approved a text detailing stringent obligations for the industry’s largest platforms, described as “watchdogs.” Designated platforms will not be allowed to preferentially rank their own services or similar products, nor restrict users from engaging with non-platform companies. They may not force removal of pre-installed software or monitor end users for targeted advertising without prior consent. Identified platforms have six months to demonstrate compliance and must notify the European Commission of planned mergers or acquisitions, including potential new leadership roles, by February 2024.
Millionaire fines
The DMA, alongside the Digital Services Act (DSA), aims to curb the market power of dominant platforms across nine sectors: social networks, desktop and mobile operating systems, web browsers, search engines, digital commerce platforms, travel services, and both video and audio streaming. The gatekeeper framework is designed to push platforms to adapt their technologies and business models to meet DMA obligations, as explained by Thierry Breton, the European Commissioner for the Internal Market.
The intention is to deliver more choice for consumers and create opportunities for smaller, innovative tech companies. In essence, the goal is to expand openness on the Internet. If compliance fails, authorities warn of consequences, including significant penalties totaling up to 10% or even 20% of global turnover for repeat offenders. Brussels may also pursue forced restructurings when obligations are not consistently met, underscoring a firm stance to enforce the rules.