What is the Digital Markets Act and why is it important

The European Commission has released the list of companies that will have to comply with the Digital Markets Act. Compared to the provisional designation in early July, there are important changes, the most striking of which is the absence of Samsung. As for the Apple and Microsoft challenge, specific investigations have been launched into the matter. Gatekeepers are defined as companies that meet three main requirements: annual turnover of 7.5 billion euros or more in the last three financial years or market capitalization of at least 75 billion euros in the last financial year; provision of services in at least three member states; and at least 45 million monthly active users and more than 10,000 active business users per year in the last three financial years.

According to the European Commission, the gatekeepers are Alphabet (Google), Amazon, Apple, ByteDance (TikTok), Meta, and Microsoft. Samsung still needs to be included compared to the provisional list in early July. The Commission determined that Samsung’s Internet browser did not meet the requirements. Gmail and were also excluded for the same reason.

Six gatekeepers and 22 services

The Commission has launched four market investigations to assess comments submitted by Apple and Microsoft. Despite meeting the thresholds, the two companies, Bing, Edge, Microsoft Advertising, and iMessage do not have to comply with the obligations of the law. The investigation will last up to five months. Another market investigation has been launched to assess whether iPadOS should be included in the list of operating systems despite lower thresholds than those set by the law. The investigation will last a maximum of 12 months. Gatekeepers will now have six months to comply with the obligations and prohibitions of the Digital Markets Act by March 6, 2024.

Confrontations are expected
Confrontations are expected

Confrontations are expected

Following the designation of gatekeepers came initial comments from Alphabet, Apple, Amazon, ByteDance, Meta, and Microsoft. Alphabet, Amazon, and Microsoft accepted the designation. Meta stated that it has yet to evaluate the designation. ByteDance, on the other hand, has criticized the Commission’s decision and may initiate a legal battle. Finally, Apple hopes that iMessage will be excluded from the obligations (interoperability with other messaging services). The Cupertino-based company also points out that the DMA risks users’ security and privacy. Apple will have to modify iOS to allow the installation of alternative stores and sideloading of apps. In case of law violations, companies risk penalties of up to 20 per cent of global turnover. The Commission could also impose structural remedies, namely the sale of certain assets.

In fact, Apple and Microsoft have asked the European Commission to exclude Bing and iMessage from the list of services that will have to comply with the Digital Markets Act. By tomorrow, so-called gatekeepers will be officially designated. Similar challenges had come from Amazon and Zalando regarding the Digital Services Act. Microsoft asked the European Commission to exclude Bing because its market share is very low (about 3%).

Therefore, it should not be subject to the same obligations as Google, i.e., to offer the possibility of choosing an alternative search engine. On the other hand, Apple claimed an exemption for iMessage, as it does not exceed 45 million monthly active users and, therefore, would not have to comply with the interoperability requirement with other messaging services. However, considering that iMessage is integrated into iPhones, iPads, and Macs, the estimated number of users is more than one billion (Apple does not provide official figures).

Antonino Caffo has been involved in journalism, particularly technology, for fifteen years. He is interested in topics related to the world of IT security but also consumer electronics. Antonino writes for the most important Italian generalist and trade publications. You can see him, sometimes, on television explaining how technology works, which is not as trivial for everyone as it seems.