The European Union has recently announced the first six tech “gatekeepers” that will fall under the bloc’s Digital Markets Act (DMA). These gatekeepers include well-known companies such as Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft. The European Commission (EC), which serves as the EU’s executive branch, has determined the gatekeepers based on various criteria, including revenue, valuation, and user numbers. Notably, Samsung has not been designated as a gatekeeper at this time.
The EC defines digital platforms as gatekeepers if they serve as a significant gateway between businesses and consumers concerning core platform services. These gatekeepers now have until March 2024 to ensure that their applicable services comply with the DMA regulations. The EC has identified 22 core platform services that the law applies to across the six companies. Alphabet’s gatekeeper services include Google ads, Google Search, Android, YouTube, Chrome, Google Maps, Google Play, and Google Shopping. Amazon’s gatekeeper services are Amazon Marketplace and Amazon ads. Apple’s gatekeeper services are iOS, App Store, and Safari. ByteDance is the gatekeeper for TikTok. Meta encompasses gatekeeper services for Facebook, Instagram, WhatsApp, Messenger, Meta Marketplace, and Meta ads. Lastly, Microsoft’s gatekeeper services involve LinkedIn and Windows.
The DMA requires gatekeepers to refrain from favoring their own services over competitors’ offerings and to allow third-party entities to interoperate with their services in specific situations. However, both Microsoft and Apple have argued that certain services, such as Bing, Edge, Microsoft Advertising, and iMessage, do not qualify as gateways and should be exempt from complying with the DMA. In response, the EC has initiated market investigations to review these claims.
In addition to these investigations, the EC has also opened an investigation to determine whether iPadOS should be designated as a core platform service. Notably, Gmail, Outlook.com, and Samsung Internet Browser did meet the thresholds set by the EC, but Alphabet, Microsoft, and Samsung were able to convince the EC that none of these services qualify as gateways for core platform services.
These new rules are expected to have a significant impact on Apple, specifically. Apple has made efforts to maintain a closed ecosystem within iOS, preventing users from sideloading apps onto iPhones. However, there have been recent reports suggesting that Apple is planning to enable sideloading in iOS 17, which could signify a shift in its approach. Microsoft and Epic Games are among the companies preparing their own mobile app stores for when the iOS ecosystem becomes more open.
Furthermore, Apple has been resistant to supporting the RCS messaging standard, despite Google’s efforts to convince them otherwise. However, if the EC designates iMessage as a gateway, Apple may be compelled to cooperate with RCS and other messaging services.
Apple has expressed concerns about the potential privacy and security risks that may emerge as a result of DMA compliance. The company is committed to mitigating these impacts and continuing to deliver the best products and services to its European customers.
Failure to adhere to the DMA rules can result in significant consequences for gatekeepers. The EC has the authority to impose fines of up to 10 percent of a gatekeeper’s global turnover for violations, which can increase to 20 percent if the violations persist. Additionally, the EC has the power to force a gatekeeper to sell a business and block it from acquiring related services in cases of systematic DMA violations.
In conclusion, the designation of these tech gatekeepers under the DMA highlights the EU’s efforts to ensure fair and open digital markets. With the new regulations in place, the European Commission aims to prevent the abuse of market dominance and foster competition and innovation within the tech industry. As these rules come into effect, it will be interesting to observe how these gatekeepers adjust their practices to comply with the DMA and the potential impact on the digital landscape in Europe.
