EU Labels Microsoft, Other Big Tech Firms as Gatekeepers

Happy 4th of July from Europe! Thierry Breton, the Commissioner for the internal market of the EU, today said that Microsoft and 6 other Big Tech firms are gatekeepers. That is, they meet the Digital Market Act‘s definition of large online platforms and thus must conform to a stricter set of regulations than other companies.

“Europe is completely reorganizing its digital space to both better protect EU citizens and enhance innovation for EU startups and companies,” the commissioner said in a statement.

Microsoft is joined by the usual suspects—Amazon, Apple, Google, and Facebook (Meta)—but also two surprises in TikTok owner ByteDance and consumer electronics giant Samsung. Oddly, those last two firms have already pledged to meet the legal requirements of the DMA, though TikTok argues that it should not even be included on the list.

The EU’s DMA specifically targets the business practices of Amazon, Apple, and Google, and it went into effect in November 2022. It defines a gatekeeper as a large Internet platform with over 45 million monthly active users, a market capitalization of over €75 billion, or about $82 billion, and “has (or is about to have) an entrenched and durable position in the market, meaning that it is stable over time if the company met the two criteria above in each of the last three financial years.”

Among the legal requirements, gatekeepers must allow third parties to interoperate with the gatekeeper’s own services in certain specific situations, allow their business users to access the data that they generate in their use of the gatekeeper’s platform, provide companies advertising on their platform with the tools and information necessary for advertisers and publishers to carry out their own independent verification of their advertisements hosted by the gatekeeper, and allow their business users to promote their offer and conclude contracts with their customers outside the gatekeeper’s platform.

Gatekeepers are likewise prohibited from treating their own in-house services more favorably than those made by third parties, preventing consumers from linking up to businesses outside their platforms, preventing users from un-installing any pre-installed software or app if they wish to do so, and tracking users outside of the gatekeepers’ core platform service for the purpose of targeted advertising, without effective consent having been granted.

Identifying the gatekeepers is the first of three steps that the EU said it would take to ensure that the DMA remains effective. The next steps include dynamically updating the obligations for gatekeepers when necessary and designing remedies to tackle systematic infringements of the Digital Markets Act rules.

Companies that do not comply with the DMA face fines of up to 10 percent of their total worldwide annual turnover, or up to 20 percent in the event of repeated infringements, plus periodic penalty payments of up to 5 percent of the average daily turnover. Systemic infringers face additional remedies behavioral and structural remedies, including the divestiture of parts of a business.