On Thursday, China’s TikTok joined Meta in appealing against the “gatekeeper” status under an EU law that brings more rigid rules for tech companies and makes it easier for users to move between competing services. The European Commission in September picked 22 core platform services from six of the world’s largest tech companies — Alphabet’s Google, Amazon, Apple, TikTok parent ByteDance, and Microsoft — to face new curbs as part of an antitrust crackdown on Big Tech.
The Digital Markets Act (DMA), which went into effect in December, gives the EC unprecedented powers to regulate digital giants with services that dominate a significant share of user traffic. It requires them to disclose more data on how their services operate and how they profile consumers. It also imposes obligations for gatekeepers to make it easier for competitors to interoperate and offer comparable services, as well as penalties of up to 20% of their global turnover for systematic non-compliance with those rules.
In response to the EU’s crackdown on large online platforms, many large technology firms have rolled back their business practices and made commitments to improve transparency. Some have even started removing content that criticizes or offends users. But Meta’s decision to challenge the “gatekeeper” designations for its Messenger and Marketplace platforms marks the first time a major company has opted to contest those designations, adding a new dimension to the debate on how Europe should regulate the industry.
Meta’s argument centers on its assertion that neither its Marketplace nor Messenger qualifies as a core platform service under the terms of the DMA. It says that the former is a consumer-to-consumer service and that the latter is a chat functionality separate from the platform’s social functions. The company also argues that it should not have been designated as a gatekeeper because it is not a dominant provider of a digital market in its own right.
The EC still needs to respond to Meta’s appeal. The EU’s antitrust watchdog is expected to decide whether the two services can keep their gatekeeper status in the coming months. It will consider a range of factors, including how widely the services are used in the EU, the degree to which they control access to the market, and the extent to which they can prevent competition from forming within the markets in which they operate.
The companies designated as gatekeepers must notify the EC of any intended mergers and acquisitions that might impact their core platform services, regardless of whether they meet the EU’s merger control thresholds. The EC will also be able to review any such transactions independently, outside of a merger control procedure. Depending on the results of its investigations, the EC could decide to amend the requirements for gatekeepers or design remedies to tackle systematic infringements. The EC is scheduled to publish the non-confidential versions of its decisions on Wednesday. It will likely publish its decision on whether or not it will grant Meta’s appeal.