Seven tech giants, including GAFAM companies (Google, Amazon, Apple, Facebook/Meta, Microsoft), as well as ByteDance (owner of TikTok) and Samsung, have informed the European Union (EU) that they will be subject to the EU’s newly introduced antitrust regime called the Digital Markets Act (DMA). The DMA takes a proactive approach to antitrust enforcement by imposing obligations and prohibitions on designated gatekeepers, who are major platforms that act as intermediaries between digital businesses and consumers. Non-compliance with the DMA could result in significant penalties of up to 10% of global annual turnover.
The DMA includes various requirements for gatekeepers, such as banning self-preferencing, restricting the use of third-party data, and mandating the sharing of app-generated data with third parties. Additionally, app store gatekeepers will not be allowed to block sideloading or force developers to use their own services, such as payment systems. The regime also prohibits practices such as tracking users for ads without their consent.
The EU aims to level the competitive playing field online by addressing unfair and exploitative behaviours that tech giants have engaged in for years. The official designation of gatekeepers will be announced by the EU Commission later in the summer, with enforcement expected to begin in spring 2024, six months after the designations are made.
While the current list of gatekeepers does not include any European tech giants, Booking.com, a homegrown travel booking platform, may be added to the list later this year. Booking.com has not yet self-notified as a gatekeeper due to the impact of COVID-19 on its business, but it anticipates meeting the DMA’s thresholds by the end of the year and will notify the European Commission accordingly.
In addition to the DMA, the EU has also introduced the Digital Services Act (DSA), which applies more broadly to online platforms. The DSA focuses on algorithmic accountability and covers very large online platforms (VLOPs) and search engines (VLOSEs). Most of the self-notifying DMA gatekeepers have already been designated as VLOPs/VLOSEs under the DSA, except for Samsung. As a result, the GAFAM companies and ByteDance will face the strictest compliance requirements under the EU’s digital regulations.