The European Commission recently confirmed that X, a social media giant, is not designated as a gatekeeper under the EU Digital Markets Act. This means that X will not have to comply with additional compliance obligations imposed on big platforms under the antitrust regulations. The decision was made despite X meeting the quantitative thresholds in terms of user numbers and turnover. The Commission stated that X does not act as a gateway between business users and end users, which is a key criteria for being designated as a gatekeeper under the DMA.
Under the DMA, big platforms are classified as gatekeepers if they have at least 45 million end users, 10,000 business users, and a turnover of €7.5 billion in Europe over the last three financial years. Gatekeepers are required to adhere to certain obligations to ensure fair competition and freedom of choice for European consumers. This includes not favoring their own services and products by ranking them higher than those of other businesses on their platform, as well as allowing users to uninstall preinstalled software or apps. Gatekeepers can face fines of up to 10% of their annual global turnover if found to be in breach of the DMA.
The European Commission had initiated an investigation into Elon Musk’s social media platform after X claimed it was not a significant gateway between businesses and consumers. The DMA came into effect in 2023 and several major tech companies, including Alphabet, Amazon, Apple, Meta, Microsoft, TikTok owner ByteDance, and Booking.com, have already been designated as gatekeepers by the EU. Apple was the first company to be found in violation of the DMA in June, as it was discovered that its App Store did not allow third-party developers to inform customers of purchasing options outside of Apple’s ecosystem.
Apple, Meta, and ByteDance have filed appeals with the EU general court disputing their classification as gatekeepers. In a ruling last July, European judges upheld the Commission’s decision to designate TikTok as a gatekeeper, prompting ByteDance to appeal the decision to the Court of Justice of the EU. Despite various tech companies facing challenges and scrutiny under the DMA, the intention behind the regulations is to promote fair competition and consumer choice within the digital marketplace.
