The European Commission’s Gatekeeper Designation under the Digital Markets Act

Understanding the European Commission’s Gatekeeper Designation

The recent statements from a Commission spokesperson highlighted that while X has met the required quantitative thresholds in terms of user numbers and turnover, it does not function as a gatekeeper between business users and end consumers. According to the Digital Markets Act (DMA), large platforms are categorized as gatekeepers when they achieve at least 45 million end users, 10,000 business users, and a turnover of €7.5 billion in Europe over the last three financial years. Most importantly, they must also serve as a crucial link between businesses and consumers.

If a platform meets these criteria, it is then obligated to adhere to certain regulations designed to promote fair competition and ensure freedom of choice for European consumers regarding the products and services available to them. For example:

  • Gatekeepers are prohibited from preferentially ranking their own services and products above those offered by other businesses on their platforms.
  • They must allow users the freedom to uninstall preinstalled software or applications.

Failure to comply with the DMA can result in substantial penalties, with fines reaching up to 10% of the offending company’s annual global turnover. In May, the European Commission initiated an investigation into Elon Musk’s social media platform after X claimed it was not a significant gateway between businesses and consumers.

Since its implementation in 2023, the Digital Markets Act has already designated several major companies as gatekeepers, including Alphabet, Amazon, Apple, Meta, Microsoft, ByteDance (the parent company of TikTok), and Booking.com.

In a notable incident, Apple became the first company to face scrutiny under the DMA in June, with EU regulators asserting that its App Store practices violated the Act by not permitting third-party developers to inform customers about purchasing options outside of Apple’s ecosystem.

In addition, companies such as Apple, Meta, and ByteDance have filed appeals with the EU General Court to contest their classification as “gatekeepers.” In July, the European judiciary delivered its first ruling confirming the Commission’s designation of TikTok as a gatekeeper, a decision that ByteDance has since appealed to the Court of Justice of the EU in an effort to overturn the General Court’s ruling.

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