Saturday, June 15, 2024

Google Search, WhatsApp, and TikTok on list of 22 services targeted by EU’s tough new DMA

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The European Commission has officially confirmed which tech companies, and which of their services, count as “gatekeepers” under its strict new Digital Markets Act (DMA). The companies listed all appeared on a provisional list released in early July, and mostly consist of American tech giants. There’s Alphabet, Amazon, Apple, Meta, and Microsoft from the US, plus ByteDance from China. 22 core platform services provided by gatekeepers must now comply with the DMA’s obligations by March 2024.

Broadly, the DMA is the EU’s attempt to rein in the market power of Big Tech by opening up entrenched platforms and curbing ecosystem lock-in and anti-competitive behavior, making them compete on the merits of their products and services alone. Major messaging apps will have an obligation to make themselves interoperable with competitors, for example, while operating systems will need to be designed to offer third-party app stores and allow developers to offer alternative in-app payment options.

Here’s the full list of core platform services, as announced by the European Commission today:

  • Social Networks: TikTok, Facebook, Instagram, LinkedIn
  • N-IICS (aka messaging services): WhatsApp, Messenger
  • Intermediation: Google Maps, Google Play, Google Shopping, Amazon Marketplace, Apple’s App Store, Meta Marketplace
  • Video Sharing: YouTube
  • Advertising services: Google, Amazon, Meta
  • Web Browsers: Chrome, Safari
  • Search: Google Search
  • Operating Systems: Android, iOS, Windows

Samsung, which appeared on the previous list, successfully argued that it does not meet the threshold for being a gatekeeper with its internet browser.

Likewise Microsoft’s Bing search engine, Edge browser, and advertising service are not on the list, but the Commission says it’s opening market investigations to assess whether they meet the bar for regulation. The same is true of Apple’s iMessage service. The Commission has said these investigation will take no more than five months, but could result in Apple being forced to make iMessage interoperable with competing services upon request. It’s also investigating whether iPadOS should be designated as a gatekeeper in an investigation set to last no longer than a year.

The exact rules companies will have to obey depend on which of their services the commission has deemed to hit its bar for regulation (it calls these “core platform services”). Meta’s Instagram and Facebook are set to be regulated as online social networking services, for example, while Google Search will be regulated as a search engine and Microsoft’s Windows will be regulated as an operating system.  

The DMA uses several criteria to determine whether a company and its service should be designated as a gatekeeper, including whether a company has an annual turnover of over €7.5 billion (around $8 billion) in Europe and a market cap of over €75 billion (around $80.5 billion), and whether a service has over 45 million monthly active users in the EU.

Meanwhile the likes of Google Search (and Bing, if it ends up being included) will have to give their users a choice of other search engines, while operating system providers will need to offer the ability to uninstall pre-installed apps and change system defaults like virtual assistants and web browsers. Gatekeepers will be banned from self-preferencing their own products and services compared to other companies on their platforms. The commission has put out a pretty extensive FAQ listing all the obligations.

The timeline for compliance.
Image: European Commission

In a statement given to Reuters, Apple raised concerns about the DMA’s impact on the privacy and security of its services. “Our focus will be on how we mitigate these impacts and continue to deliver the very best products and services to our European customers,” the company said. Meta said it was evaluating the commission’s designation, while Microsoft accepted its designation while also welcoming the investigations into whether its search engine, browser, and advertising service will have to comply.

In a blog post, Google’s Oliver Bethell said the company is reviewing its designation and assessing its implications. “Our aim is to make changes that meet the new requirements while protecting the user experience and providing helpful, innovative and safe products for people in Europe,” Bethell writes. Amazon spokesperson Sam Barratt said the company is working with the European Commission to finalize its implementation plans.

ByteDance, however, was more critical of its gatekeeper designation. TikTok’s Brussels public policy head Caroline Greer noted that the company “fundamentally” disagrees with the decision. “TikTok has brought choice to a space largely controlled by incumbents and this decision risks undermining the DMA’s stated goal by protecting actual gatekeepers from newer competitors like TikTok,” Greer said in a statement. “We’re extremely disappointed that no market investigation was conducted prior to this decision and are evaluating our next steps.”

If designated gatekeepers don’t comply with the DMA’s rules, the Commission can impose fines of up to 10 percent of a company’s total worldwide turnover, or as much as 20 percent for repeat offenders. The Commission can even impose structural remedies, like forcing a gatekeeper to sell part of its business.

Although today’s announcement is a significant step towards implementing the DMA, the process is far from over. The FT previously noted that the commission is bracing itself for legal challenges over the rules, similar to what we’ve seen with Amazon and German retailer Zalando challenging the EU over their designations as “very large online platforms” under the Digital Services Act (DSA). 

Update September 6th, 7:45AM ET: Updated with responses from Apple, Facebook, Microsoft, Amazon, ByteDance, and Google.

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