EU confirms the six big tech players hit by tough new competition rules

The European Union has identified the first six tech “gatekeepers” that will need to follow strict new regulations under the Digital Markets Act (DMA). These familiar names include Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft. Samsung, however, did not make the list as a gatekeeper.

The EU defines digital platforms as gatekeepers if they play a crucial role as a gateway between businesses and consumers for core platform services. The designated gatekeepers have until March 2024 to ensure that their services comply with the DMA rules. The law covers 22 core platform services across the six companies.

Alphabet’s core platform services include Google ads, Google Search, Android, YouTube, Chrome, Google Maps, Google Play, and Google Shopping. Amazon’s services are Amazon Marketplace and Amazon ads. Apple is responsible for iOS, App Store, and Safari. ByteDance’s service is TikTok. Meta oversees Facebook, Instagram, WhatsApp, Messenger, Meta Marketplace, and Meta ads. Microsoft manages LinkedIn and Windows.
The DMA states that gatekeepers cannot show preference for their own services over those of competitors and cannot keep users restricted to their own ecosystems. They must also allow third-party entities to interact with their services in certain situations.

Microsoft and Apple have argued that Bing, Edge, Microsoft Advertising, and iMessage do not meet the criteria to be considered gateways and therefore should not have to comply with the DMA. The European Commission has initiated market investigations in each case to assess the companies’ arguments.

The European Commission has noted that iPadOS does not meet the established criteria, but a market investigation has been initiated to determine if it should be classified as a core platform service. Gmail, Outlook.com, and Samsung Internet Browser did meet the criteria, but Alphabet, Microsoft, and Samsung successfully argued to the EC that these services do not qualify as gateways for core platform services.

These regulations are expected to significantly impact Apple, as the company has historically maintained strict control over the iOS ecosystem despite attempts by jailbreakers to sideload apps onto iPhones. Reports have suggested that Apple may allow third-party app stores and sideloading in iOS 17, with more information potentially being revealed at the upcoming fall iPhone event.

Apple has also resisted Google’s efforts to support the RCS messaging standard, highlighting the value of iMessage and blue text bubbles. However, if iMessage is designated as a gateway, Apple may be compelled to cooperate with RCS and other messaging services.

In response to DMA compliance concerns, Apple has expressed worries about potential privacy and security risks. The company stated, “Our focus will be on how we mitigate these impacts and continue to deliver the very best products and services to our European customers.”

Failure to comply with DMA regulations can result in significant penalties, with the European Commission having the authority to fine infringing gatekeepers up to 10 percent of their global turnover. This penalty can increase to 20 percent for repeat violations, and the EC can also mandate the divestiture of a business and prohibit the acquisition of related services in cases of systematic DMA breaches.