DMA Insight #9: The designated few – no surprises and a few decisions still in the air following DMA designations

As the summer slowly comes to its end, the European Commission keeps speeding up to put flesh on the DMA’s bones.

Who are the new gatekeepers?

In a sector of constant change as it is the tech world, few things are as certain as which companies are under the European Commission’s radar.

The Commission designated as gatekeepers the five American tech giants – Alphabet (Google’s parent company), Amazon, Apple, Meta and Microsoft – and ByteDance, whose successful video platform TikTok has turned the social network market upside down.

These are six out of the seven companies that submitted notifications as potential gatekeepers, being Samsung the only one eventually spared by the Commission’s review.

It is yet to be seen whether any European gatekeepers will be added to this list in the future. The best-placed candidate so far is the Dutch online travel agency Booking.com, which announced in July that it was expecting to meet the thresholds by the end of 2023.

The designation system

Under the DMA rules, to be designated as a gatekeeper, a company needs to provide “core platform services”, which are those that constitute important gateways for business users to reach end users.

These include, among others, social networks, messaging services, computer and smartphone operating systems, search engines, online marketplaces and app stores.

In addition, gatekeepers need to meet certain quantitative thresholds in each of the last three financial years:

• at least EUR 7.5 billion annual EEA turnover (or 75 billion average market capitalisation in the last financial year),
• providing the same core platform service in at least three Member States, and
• having had at least 45 million monthly active users and 10,000 yearly active business users in the EU.

If these thresholds are met, a company is presumed to be a gatekeeper and must submit a notification. It has the opportunity to argue that, despite meeting the thresholds, due to the nature of its services, it should not be considered a gatekeeper (or at least not in respect of all of its services).

Gatekeepers’ pushback on some services leads to market investigations

Of all the services provided by the six designated gatekeepers, the Commission established that 22 of them constitute “important gateways between business and end users”. These include social networks like Facebook, Instagram, TikTok and LinkedIn, messaging services like WhatsApp and Facebook Messenger and browsers like Google Chrome or Safari (see full list below).

The Commission has also accepted the arguments provided by Alphabet, Microsoft and Samsung to show that their services Gmail, Outlook and Samsung Internet Browsers, despite meeting the thresholds, do not qualify as “important gateways” under the DMA.

Similar arguments have been provided by Microsoft in respect of Edge, Bing, Microsoft Advertising and by Apple in respect of iMessage. These are currently being examined by the Commission in four market investigations.

An additional investigation has been opened to clarify whether Apple's iPadOS should be designated despite not meeting the thresholds.

Compliance clock is ticking

Designated gatekeepers have now six months to comply with all their duties under the DMA. Some of them even start to apply as of now, like the obligation to notify any intended concentration. They risk fines of up to 10% of their global turnover, even 20% in case of reiterative infringements.

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Designated core platform services

• Social networks: Facebook and Instagram (Meta), LinkedIn (Microsoft) and TikTok (ByteDance).
• Messaging apps: WhatsApp and Messenger (Meta).
• Browsers: Google Chrome (Alphabet) and Safari (Apple).
• Video sharing platforms: YouTube (Alphabet).
• Search engines: Google Search (Alphabet).
• Advertisement services: those of Google, Amazon and Meta.
• Operating systems: Google Android (Alphabet), iOS (Apple) and Windows (Microsoft).
• Other intermediation services, including Amazon and Facebook marketplaces, Apple’s App Store and its equivalent for Android, Google Play, and two additional Alphabet platforms, Google Maps and Google Shopping.