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US Tech Giants Accept European Union’s ‘Gatekeeper’ Classification

By  |  July 4, 2023
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Europe is making a fierce push to level the digital playing field with new gatekeeper regulations for major tech companies. On Monday, Big Tech giants such as Amazon, Apple, Google, Meta, and Microsoft accepted the European Union’s ‘gatekeeper’ classification under its Digital Markets Act (DMA). This Act seeks to safeguard citizens and ensure fair play for startups. Samsung and TikTok owner Bytedance also agreed to meet the criteria, although the latter disputed whether it should be included on the list.

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    The Digital Markets Act (DMA) came into effect on November 1, 2022, and is applicable from May 2, 2023. It requires companies to make their messaging apps interoperate with rivals and let users decide which apps to pre-install on their devices. Companies are deemed ‘gatekeepers’ of the EU if they have over 45 million active users per month and a market capitalization of €75 billion. As a result, Big Tech companies must comply with a series of regulations that prevent abuse and ensure fairness.

    “Europe is completely reorganising its digital space to both better protect EU citizens and enhance innovation for EU startups and companies,” said EU industry chief Thierry Breton. Gerard de Graaf, an EU official who helped pass the DMA agrees: “We expect the consequences to be significant.” Failure to comply with the DMA rules risks launching an EU investigation or penalties such as fines of 10% of total worldwide turnover.

    Read more: FTC Chair Says Antitrust Enforcement May Keep US Tech Ahead Of China

    Some companies, however, have argued their inclusion on the list. For instance, TikTok’s spokesperson claims that it does not meet the DMA’s overall requirements. Yet Booking.com announced it anticipated meeting the gatekeeper threshold by the end of the year.

    The first list of ‘gatekeepers’ does not include any European tech giants, raising concerns about the region’s capacity to foster and sustain technological growth. The lack of European-based gatekeepers may hinder its ability to compete in the digital economy.

    If companies are confirmed to be gatekeepers, the DMA’s rules will obligate a major overhaul in the behaviour of Big Tech companies. Apple, for example, will have to allow side-loading of apps on iPhones, use of third-party payment systems, and let users opt for alternative voice assistants. Gatekeepers will also be forbidden from promoting their own services over those of rivals.

    The EU will announce the confirmation of tech firms’ gatekeeper status by September 6, 2023. By then, companies must have adopted the appropriate statutory requirements or suffer the consequences. One thing is for sure: Europe’s Digital Markets Act affects the entire digital ecosystem and its implementation is being closely watched by both citizens and the industry.