Six tech companies have informed the European Commission that they met the criteria to be classified as “gatekeepers” under the European Union’s Digital Markets Act (DMA).
Alphabet, Amazon, Apple, TikTok, Meta, Microsoft, and Samsung now meet the thresholds under EU law after the passage of the new act, EU industry chief Thierry Breton said on July 4.
EU authorities will first review the submissions by the tech companies involved, after which they will be confirmed as gatekeepers by Sept. 6.
After the September deadline, any companies that fail to comply will then have six months to comply with the DMA rules.
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The DMA, which came into force in November, declared that social media firms with an $82 billion market capitalization in the last financial year and a presence in at least three member states of the EU, are now considered “gatekeepers” that provide a core platform service.
Companies with an annual turnover in Europe of at least $8.16 billion in the last three financial years are considered gatekeepers as well.They must also have served more than 45 million monthly active users and more than 10,000 yearly active business users in the EU over the last three years.
Companies labelled as gatekeepers will be required to allow their messaging apps to interoperate third-party rivals and allow users to decide which apps to pre-install on their devices.
Under the DMA, gatekeepers will be forbidden from favoring their own services over their rivals, or keeping users from removing pre-installed software or apps from their systems, which is expected to hit Google and Apple hard.
Business users will now be allowed to promote their products or services and “conclude contracts with their customers outside the gatekeepers’ platform.”This move will prevent Google and Apple from stopping developers from using a different payment systems other than their own.
For years, Apple’s iPhone ecosystem has operated as a walled off tech space. These changes are expected to revolutionize how its operating system functions.
“Europe is completely reorganising its digital space to both better protect EU citizens and enhance innovation for EU startups and companies,” Breton said in a statement.
Big tech “messaging apps will have to interoperate with others,” he declared.Companies can be fined up to 10 percent of annual global turnover for DMA violations and 20 percent for repeat offenders.
Repeat violators could lead the European Commission to “open a market investigation and, if necessary, impose behavioural or structural remedies.”
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Although TikTok’s owner ByteDance said they would meet the criteria, it has disputed whether it should be included on the list.TikTok said it falls short of the overall requirements set out under the rule, which requires a gatekeeper to have an “unavoidable platform to conducting online business in the EU” and be an “entrenched” gateway between consumers and businesses.
Meanwhile, Booking.com said it expected to fall into the gatekeeper category by the end of 2023, after falling short of the quantitative threshold ahead of the July 3 notification date to the commission due to the pandemic.Apple told Financial Times that the new law “will create unnecessary privacy and security vulnerabilities for our users” as it makes changes to permit third-party app stores in its operating system.
The American tech giant may, on the other hand, only allow the changes to its systems in Europe or other countries mandating similar changes.
Last week, Meta said it would finally allow users to download apps via Facebook ads in Europe.
“European regulators making light of their Digital Markets Act enforcement, burying the fact that their ‘gatekeeper’ list does not include a single European company,” said Adam Kovacevich, the CEO of an American tech industry coalition, in a tweet.
