In a significant move aimed at reining in Big Tech, the European Union has unveiled the first list of “gatekeepers” obligated to comply with the new Digital Markets Act, effective immediately. This list includes tech giants like Apple, Google, Microsoft, Amazon, Meta, and China’s ByteDance, the parent company of TikTok, as per the report by The Financial Times.
Brussels’ decision mandates these companies to share data with competitors and ensure interoperability with rival services, among other obligations, under the threat of substantial fines. The primary objective of this legislation is to foster increased competition within the European tech sector.
However, the European Commission is deliberating whether to extend these regulations to Apple’s iMessage and three Microsoft services—Bing Search, Edge browser, and Microsoft Ads, based on information from insiders.
EU regulators will initiate an investigation to determine the applicability of the new law to these additional services, with a separate year-long assessment for Apple’s iPad operating system, despite no formal submission from Apple.
The Digital Markets Act imposes certain criteria for gatekeepers, including an annual turnover exceeding €7.5 billion, a market value of over €75 billion, and 45 million active monthly EU users. However, EU regulators retain discretion for designation beyond these metrics. Samsung successfully argued that its smartphone web browser, Samsung Internet, should not fall under the new rules.
Microsoft contends that Bing should not be held to the same obligations as Google Search, while Apple argues that iMessage lacks the user numbers required for inclusion.
The European Commission anticipates potential legal challenges from these tech giants as they implement the new obligations. These obligations include the requirement to notify the commission of intentions to acquire competitors and the establishment of a compliance function.
While these companies have a six-month grace period to demonstrate compliance with the remaining rules, they must promptly seek user consent for data merging and positioning their products above competitors on their platforms.
By March of the following year, these tech giants must publish a compliance report outlining their adherence to the law, with potential fines of up to 10 percent of their global turnover for violations, subject to appeal.
These regulatory changes coincide with increased scrutiny of tech companies’ actions in Europe, exemplified by the threat to break up Google and the impending block of Etravely’s acquisition by EU bookings. The former Competition Commissioner, Margrethe Vestager, has become the official candidate for the presidency of the European Investment Bank, with Belgian Commissioner Didier Randers temporarily assuming her competition portfolio.
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