The European Union has named six tech giants. Whose market power it hopes to rein in by applying a new set of EU’s New Digital Regulations. Pro-competition rules on how these gatekeepers can operate designated “core platform services”. The six so-called “gatekeepers” are: Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft.
The Commission says a total of 22 core platform services operated by the six gatekeepers have been designated under the Digital Markets Act (DMA).
Here’s the full breakdown of EU’s New Digital Regulations
Four social networks (TikTok, Facebook, Instagram, LinkedIn). Six “intermediation” services (Google Maps, Google Play, Google Shopping, Amazon Marketplace, iOS App Store, Meta Marketplace). Three ADS, or ads delivery systems (Google, Amazon and Meta). Two browsers (Chrome, Safari); three operating systems (Google Android, iOS, Windows PC OS). Two N-IICS, or Number-Independent Interpersonal Communication Service in the regulatory jargon, (WhatsApp, Facebook Messenger). One search engine (Google); and one video sharing platform (YouTube).
The DMA takes a proactive approach to competition concern once a certain threshold of market power is achieved. Including giants having 45 million+ active local users. Other gatekeeper criteria include a turnover of €7.5BN+ in the last three financial years. And a market capitalization that exceeds €75BN. Although the Commission has a degree of discretion in making designations to ensure the law is able to target platforms that look set to gain an “entrenched and durable” position in the “near future”.
The EU’s New Digital Regulations technically started to apply in May. After the final details had been agreed by EU lawmakers earlier this year. That accord followed lengthy negotiations between the European Parliament and Council on the Commission’s late 2020. Proposal to reform its approach to digital competition.
Seven tech giants.
Alphabet/Google, Apple, Amazon, ByeDance/TikTok, Meta/Facebook, Microsoft and Samsung — had said they expected to be subject to the regime. But Samsung isn’t on today’s official list, so TikTok’s parent ByteDance is the sole non-US tech giant listed.
In another couple of surprising omissions. Also not listed as core platform services are Google’s web-based email service, Gmail; and Microsoft’s rival webmail offering, Outlook.com. The omission of any webmail services from the get-go is certainly notable. There are also no cloud storage platforms listed.
“[T]he Commission has concluded that, although Gmail, Outlook.com and Samsung Internet Browser meet the thresholds under the DMA to qualify as a gatekeeper, Alphabet, Microsoft and Samsung provided sufficiently justified arguments showing that these services do not qualify as gateways for the respective core platform services,” the EU wrote. “Therefore, the Commission decided not to designate Gmail, Outlook.com and Samsung Internet Browser as core platform services. It follows that Samsung is not designated as gatekeeper with respect to any core platform service.”
Key provisions
Key provisions the DMA applies to core platform services include a ban on self-preferencing or gatekeepers requiring business users to make use of their own services. A ban on gatekeeping app stores preventing the installation of rival stores. Gatekeepers also cannot ban business users from offering and promoting competing services. They have an obligation to share with them information that their platform usage generates.
There are also data portability and service interoperability requirements. Including specific interoperability obligations for messaging giants and choice screens-style obligations for OSes, browsers, search engines and virtual assistants. Plus there’s a ban on gatekeepers tracking and profiling users for ad targeting unless they obtain their consent. A ban on stopping users from un-installing gatekeeper preloads. And a requirement to apply FRAND terms for general access (and avoid discriminatory T&Cs) for fair dealing with business users.
Speech at a digital conference
Giving a speech at a digital conference in Estonia yesterday, the EU’s internal market commissioner, Thierry Breton, summarized the bloc’s aims for the regulation. “We know that some tech giants have used their market power to give their own products and services an unfair advantage and hold back competitors from doing business and creating added value and jobs. These practices distort competition, undermine free consumer choice and hold back SMEs’ innovation potential notably arising from Web 4.0 and virtual worlds,” he said.
“It was high time that Europe sets its rules of the game upfront, providing a clear enforceable legal framework to foster innovation, competitiveness and the resilience of the Single Market, rather than having to rely on lengthy and not always effective antitrust investigations. The DMA does just that.”
Penalties for breaching the regime can scale up to 10% of global annual turnover — or even 20% for severe repeat offences.
Beyond that, the Commission also has the power to apply additional remedies — such as requiring a gatekeeper sells a business or parts of it, or banning gatekeepers from acquisitions of additional services related to “systemic non-compliance”. And, on this front, it’s notable that the EU’s competition division, which has been investigating Google’s adtech business since 2021, warned this summer the only effective remedy if its concerns are confirmed would be to break Google up.
