Several major tech platform companies have recently acknowledged that they meet the criteria to be considered gatekeepers under the Digital Markets Act (DMA) in the European Union (EU). The deadline for these companies to notify the EU has passed, and now the EU will review their submissions and designate them as gatekeepers for specific platform services by September 6th. The companies that have officially acknowledged their status as gatekeepers include Alphabet (Google), Amazon, Apple, ByteDance (TikTok), Meta (Facebook, Instagram, Whatsapp), Microsoft, and Samsung. To be eligible for this designation, companies must have a market capitalization of over €75 billion ($82 billion) and own a social platform or app with at least 45 million monthly users or 10,000 active business users.
New Rules for Gatekeepers
Under the DMA, gatekeepers will be subject to a set of rules aimed at promoting fair competition and protecting users’ interests. EU commissioner Thierry Breton has outlined several key items in these new rules. Firstly, gatekeepers will no longer be able to lock users into their own ecosystem. This means that users will have more freedom to choose which apps and app stores they use, as gatekeepers will no longer have the power to decide which apps are pre-installed on devices or which app store users must use. Additionally, gatekeepers will be prohibited from self-preferencing, which means they will not be allowed to give preferential treatment to their own products and services over those of competitors. Furthermore, messaging apps owned by gatekeepers will be required to interoperate with other messaging apps, promoting greater communication between different platforms.
Failure to comply with these rules could result in significant penalties for gatekeepers. Companies that violate the DMA could be fined up to 10 percent of their total worldwide turnover, with repeat offenders facing fines of up to 20 percent. In addition to fines, the EU commission may also open a market investigation and impose behavioral or structural remedies on companies that repeatedly fail to comply with the rules.
Controversies and New Avenues for Competition
While most of the companies on the list have accepted their designation as gatekeepers, there have been some disputes and concerns. TikTok’s parent company, ByteDance, has disputed its placement on the list, and Booking.com has informed regulators that it expects to be included on the list next year. Apple, in particular, has voiced concerns about the new law, stating that it will create privacy and security vulnerabilities for its users. However, Apple has planned to allow third-party app stores in its iOS 17, albeit with potential restrictions such as limiting them to Europe or mandating certain security requirements.
In addition to the regulatory implications, the designation of gatekeepers and the implementation of the DMA are also leading to new avenues for competition among the tech giants. Meta, for example, recently announced that it will allow users to download apps via Facebook ads in Europe, opening up a new way for users to access and discover apps.
The European Union has designated several major tech platform companies as gatekeepers under the Digital Markets Act. These companies will now be subject to a set of rules aimed at promoting fair competition and protecting user interests. Failure to comply with these rules could result in significant penalties. The designation of gatekeepers and the implementation of the DMA are also leading to new developments and competition within the tech industry.