Apple, one of the Big Tech companies, has now joined Meta and TikTok owner ByteDance in challenging the definition of their platforms as part of the European Union’s Digital Markets Act (DMA). This legislation allows regulators to designate dominant companies’ services or platforms as “gatekeepers,” effectively identifying them as big and powerful enough to act as a bottleneck between businesses and customers. It then empowers the regulators to fine these companies for any prohibited behavior. The DMA currently targets 22 gatekeeper services operated by six major tech companies including Apple, Microsoft, Google, Meta, Amazon, and TikTok.
The main objective of the DMA is to encourage consumer-friendly competition and prevent businesses from imposing unfair conditions on customers. The Act aims to create a more level playing field within the digital market, ensuring that smaller players are not unfairly disadvantaged by larger, more dominant platforms.
The EU Court of Justice announced that Apple had formally objected to the DMA, echoing the moves made by Meta and ByteDance. While the specifics of the complaint are not public, reports from Bloomberg News indicated that Apple’s challenge is specifically related to the gatekeeper designation of its App Store. This move by Apple comes at a time when the company has also expressed its intention to support RCS on the iPhone, potentially addressing some of the concerns raised by the EU about consumer lock-in related to iMessage.
Interestingly, while Microsoft and Google have reportedly accepted their DMA designations, Meta and ByteDance have contested theirs. Meta, in particular, has questioned the gatekeeper labels assigned to its Messenger and Marketplace services, seeking further clarification on why they were included. Notably, Meta did not challenge the inclusion of Facebook, Instagram, and WhatsApp in the gatekeeper designation. The company has argued that Marketplace is a consumer-to-consumer service, and Messenger is a chat feature on Facebook, rather than an online intermediary.
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Similarly, ByteDance has also contested the gatekeeper designation of TikTok, asserting that the platform is actually a challenger in the social market rather than an established gatekeeper. The company has highlighted that designating its platform as such would only serve to protect more established companies, potentially stifling competition and innovation in the social media space.
The DMA carries significant penalties for non-compliance, including fines of up to 10 percent of a company’s global turnover, with repeat offenders facing fines of up to 20 percent. Additionally, companies can face periodic fines of up to five percent of their average daily turnover, and market investigations could result in other penalties, including the divestiture of parts of a business.
Overall, the DMA and DSA are indicative of the European Union’s efforts to regulate and ensure fair competition in the digital market. These legislative measures underscore the EU’s commitment to promoting consumer rights and preventing the abuse of dominant positions by big tech companies. As these legal challenges unfold, they are likely to have far-reaching implications for the future of digital markets in Europe and beyond.
