On September 6, 2023, the European Commission published a press release to designate six companies — Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft — as “gatekeepers” under Regulation (EU) 2022/1925 on Contestable and Fair Markets in the Digital Sector (Digital Markets Act, DMA). Gatekeepers are important market players that hold considerable market power and provide at least one core platform service. The six designated gatekeepers provide 22 core platform services in total. They must comply with the new requirements of the European Union (EU) under the DMA by March 2024.
The complete decisions will be made publicly available at a later point.
Background on the Digital Markets Act and Digital Services Act
The DMA and Regulation (EU) 2022/2065 on a Single Market for Digital Services (Digital Services Act, DSA) form the new digital framework of the EU to “create a safer digital space” for users and businesses. The European Commission proposed both acts in December 2020.
The DSA deals with companies providing digital services in the EU. Obligations differ depending on the type of service provided. In particular, in April 2023, the Commission published a list of 17 companies the Commission had designated as very large online platforms (VLOPs) and two companies as very large online search engines (VLOSEs). The VLOPs included Google Maps, Google Play, Facebook and Instagram, LinkedIn, TikTok, YouTube and Zalando, while the two VLOSEs were Bing and Google Search. All these platforms and search engines reach at least 45 million monthly active users and, therefore, have to comply with the full set of obligations under the DSA. (DSA art. 33, para. 1.)
The goal of the DMA is “to contribute to the proper functioning of the internal market by laying down harmonised rules ensuring for all businesses, contestable and fair markets in the digital sector across the Union where gatekeepers are present, to the benefit of business users and end users.” (DMA art. 1, para. 1.) The DMA entered into force in November 2022. Article 54 states that the act would apply beginning May 2, 2023.
Definitions of “Gatekeepers” and “Core Platform Services”
The DMA identifies “gatekeepers” as undertakings providing core platform services that fulfil the following three criteria. Gatekeepers
- have “a significant impact on the internal market,” meaning a strong economic position, a high annual EU turnover (7.5 billion euros (about US$8 billion) in each of the last three financial years, or an average market capitalization or an equivalent fair market value of at least 75 billion euros (about US$79.5 billion) in the last financial year), and provide the service in at least three member states;
- provide “a core platform service which is an important gateway for business users to reach end users,” meaning they hold an important intermediation position; and
- enjoy “an entrenched and durable position, in [their] operations, or it is foreseeable that [they] will enjoy such a position in the near future,” meaning that their market position is stable and the company has reached both criteria above in each of the last three financial years. (Art. 2, para. 1; art. 3, paras. 1 and 2.)
Core platform services can include:
- Online intermediation services (for example, Google Maps by Alphabet, Amazon Marketplace by Amazon).
- Online search engines (for example, Google Search by Alphabet).
- Online social networking services (for example, TikTok by ByteDance, Facebook and Instagram by Meta, LinkedIn by Microsoft).
- Video-sharing platform services (for example, YouTube by Alphabet).
- Number-independent interpersonal communications services (for example, Whatsapp and Messenger by Meta).
- Web browsers (for example, Chrome by Alphabet and Safari by Apple). (Art. 2, para. 2.)
Companies may be designated both as VLOPs or VLOSE under the DSA and as core platform services under the DMA. Examples of this dual designation are Google Maps, Google Play, Facebook, Instagram, LinkedIn, TikTok, YouTube, and Google Search.
The European Commission’s decision to designate the six mentioned companies as gatekeepers followed a review process conducted by the Commission. (Art. 3, para. 4.) In addition to the six designated gatekeepers, Samsung was also notified about its potential inclusion on the list. However, even though Samsung Internet Browser meets the thresholds under the DMA to qualify as a gatekeeper, it was not included because Samsung “provided sufficiently justified arguments that [this service does] not qualify as [a gateway] for the respective core platform services.” Likewise, Gmail by Alphabet and Outlook.com by Microsoft were not included either.
The possible inclusion of more core platform services by Microsoft and Apple is still part of an open market investigation.
Obligations for Gatekeepers
The six gatekeepers have six months to comply with the obligations and prohibitions under the DMA. (Art. 3, para. 10; arts. 5–8.) Compliance must be ensured for each of their designated core platform services and a detailed compliance report must be submitted. (Art. 11.)
Gatekeepers must inform the European Commission of any “intended concentration” within the meaning of the EU Merger Regulation, which implies that the Commission must be notified whenever a gatekeeper proposes a merger with another company, irrespective of whether it is notifiable under the EU Merger Regulation or national merger rules. (Art. 14.)
Furthermore, they must comply with the “do’s” and “don’ts” in their daily operations. For example, gatekeeper platforms must allow their users to access the data they generated while using the platform and must provide advertising companies with the necessary information to verify their advertisements hosted by the gatekeeper independently. On the other hand, gatekeepers are not allowed to prevent users from uninstalling any preinstalled software or app and cannot treat their own services and products more favorably by ranking them differently from similar services of third parties. (Art. 6, paras. 3, 5, 8, 9.)
Prepared by Lea Marie Ruschinzik, Law Library Intern, under the supervision of Jenny Gesley, Foreign Law Specialist
September 26, 2023
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