EU labels major tech services as ‘gatekeepers’ in big tech oversigh

The European Union (EU) Commission has taken action against major tech companies by designating 22 of their services as “gatekeepers” in its latest move to regulate Big Tech. These firms include Alphabet (parent of Google), Amazon, Apple, Meta (parent of Facebook), Microsoft, and ByteDance (parent of TikTok).

This decision is part of the Digital Markets Act (DMA), which came into effect in November. Under this act, companies with more than 45 million monthly active users and a market capitalization of 75 billion euros are considered gatekeepers of core platform services.

Gatekeeper companies are now obligated to make their messaging apps compatible with rival services and allow users to choose which apps they want pre-installed on their devices.

Among these tech giants, Google and Meta have the highest number of services designated as gatekeepers. Google’s services, including the Android operating system, Maps, and Search, will face stricter regulations. Meta’s platforms, such as Facebook, Instagram, Marketplace, and WhatsApp, also fall under this category.

These companies have six months to demonstrate their compliance with these new obligations. Failure to comply could result in fines of up to 10% of their annual global turnover.

Gatekeeper companies can request an interim measure to suspend these rules. However, this would require launching a legal case in the EU Court of Justice in Luxembourg, a step that has not yet been taken.

The EU’s industry chief, Thierry Breton said on X (formerly Twitter) “It’s D-Day for #DMA!,” and added, “The most impactful online companies will now have to play by our EU rules.”

While Microsoft has accepted its gatekeeper designation, Meta, Google, and Amazon are in the process of reviewing the designations. However, Apple and TikTok have expressed reservations. 

TikTok “fundamentally” disagrees with the decision, citing the absence of a prior market investigation and is evaluating its next steps. Apple is concerned about the privacy and data security risks posed by the DMA, particularly the potential for increased installation of apps that do not come from the Apple App Store through “side-loading.”

“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,” emphasized Stavroula Vryna, partner at law firm Clifford Chance.

Notably, Alphabet’s Gmail, Microsoft’s Outlook, and Samsung’s browser were exempted from these regulations after the companies provided justifications showing that these services do not qualify as gatekeepers.

Additionally, the Commission has initiated four market investigations to further assess Microsoft’s and Apple’s submissions that some of their core platforms, including Bing, Edge, Microsoft Advertising, and Apple’s iMessage services, do not meet the criteria for being gateways. 

Near the end of 2022, Apple was reportedly getting ready to allow third party app stores on iOS in order to comply with the DMA, which was a little over a month old at the time.