EU’s DMA targets tech giants as gatekeepers

Jul 5, 2023, 4:22 PM UTC
3 mins read

Seven prominent companies, predominantly American tech giants, have informed the European Commission that they qualify as “gatekeepers” under the Digital Markets Act (DMA). Alphabet, Amazon, Apple, TikTok owner ByteDance, Meta, Microsoft, and Samsung have all confirmed that they meet the EU’s predefined criteria outlined in the new legislation. Furthermore, it is expected that Booking [.com] will also attain gatekeeper status by the end of this year and notify the authorities accordingly. These designations carry substantial implications as gatekeepers are entities that wield significant influence over digital markets and face specific regulatory obligations.

The DMA identifies gatekeepers as companies that have achieved an annual turnover in Europe of at least €7.5 billion (US$8.16 billion) over the past three financial years, or those with a fair market value of at least €75 billion (US$81.6 billion) in the previous financial year across a minimum of three EU member states. Additionally, gatekeepers must have served over 45 million monthly active end users and more than 10,000 yearly active business users within the European Union over the past three years. These benchmarks have been strategically set to encompass major industry players, reflecting the core intent of the law to regulate significant online platforms functioning as digital “gatekeepers.”

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Under the provisions of the DMA, gatekeepers will be legally barred from favoring their own services at the expense of competitors and will be prohibited from enforcing user lock-ins. Furthermore, gatekeepers must enable third-party interoperability with their services and provide business users the ability to promote their products or services, as well as engage in direct customer interactions outside the gatekeeper’s platform. For companies like Google and Apple, this translates to an obligation to permit developers to use alternative payment systems rather than being bound to the gatekeeper’s proprietary system. Additionally, gatekeepers are restricted from preventing users from uninstalling pre-installed applications or from sideloading applications from external sources. The most profound impact is expected to be on Apple, whose ecosystem has long operated as a self-contained “walled garden.” Reports from December 2022 indicated that Apple was preparing to introduce third-party app stores and sideloading with the release of iOS 17, anticipating the regulatory changes ahead.

All gatekeepers will be required to adhere to the comprehensive provisions of the DMA by 2024. Presently, European authorities are diligently reviewing the submissions made by the companies and are expected to designate gatekeepers for specific platform services by September 6th. This process marks a critical step in the implementation of the DMA, as it sets the stage for a new era of oversight and accountability for digital gatekeepers in the European Union.

Source: Reuters

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