Meta and ByteDance, the parent companies of popular platforms like Facebook, Instagram, WhatsApp, and TikTok, have recently launched challenges against the gatekeeper status designated to them the European Commission under the EU’s Digital Markets Act (DMA). This legislation, which came into force in September 2023, aims to curb the power of large tech corporations and regulate their integration of digital services and handling of customer data.
The EU’s DMA targets companies with a significant market capitalization and sales in Europe, along with a substantial user base within the European Union. Furthermore, the legislation focuses on digital platforms that provide core services such as web browsers, virtual assistants, and messaging or social media platforms. In response to the DMA, the European Commission compiled a list of 22 gatekeeper services associated with six tech giants, including Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft.
While Microsoft and Google have chosen not to challenge their designation, Apple and Amazon are reportedly considering their options and have not made any public statements. However, Meta has decided to accept the gatekeeper status assigned to Facebook, Instagram, and WhatsApp, but is contesting the designation for its Messenger and Marketplace platforms.
Similarly, ByteDance has taken legal action against the classification of TikTok as a social network, asserting that the EU’s characterization is incorrect. Both companies are seeking legal clarity and are cooperating with the European Commission to ensure compliance with the DMA.
Under the DMA, gatekeepers must comply with its provisions March 7, 2024. Failure to do so may result in fines of up to 10% of the company’s total global turnover, with the potential for the penalty to increase to 20% in the case of repeated non-compliance.
FAQ:
Q: What is the Digital Markets Act (DMA)?
A: The DMA is legislation introduced the European Union to regulate the power and conduct of large tech corporations, particularly in relation to their integration of digital services, handling of customer data, and other obligations.
Q: What is gatekeeper status?
A: Gatekeeper status is a designation under the DMA that identifies digital platforms as important intermediaries between businesses and consumers in core platform services.
Q: Which companies are challenging their gatekeeper status?
A: Meta, the parent company of Facebook, Instagram, and WhatsApp, is challenging the gatekeeper status of Messenger and Marketplace. ByteDance, the parent company of TikTok, is contesting the classification of TikTok as a social network.
Q: What are the potential consequences for not complying with the DMA?
A: Non-compliance with the DMA may result in fines of up to 10% of a company’s total worldwide turnover, which could increase to 20% for repeated violations.
Sources:
– European Commission: [URL of EU Commission]
– CNN Business: [URL of CNN Business Article]