Recently, the EU Commission has designated 22 services provided by six major tech companies as “gatekeepers” in its efforts to regulate Big Tech.
The tech companies identified as gatekeepers are Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, and TikTok owner ByteDance.
The designation is based on the European Union’s Digital Markets Act (DMA), which came into force in November.

The DMA came into force in the European Union (EU) on November 1, following approval by the European Parliament in March.
It aims to address unfair practices by tech companies acting as ‘gatekeepers’ in the online space.
The goal is to counter the dominance of Big Tech, which can hinder the growth of new platforms and innovations.
The DMA applies six months after entering into force, starting from May 2, 2023.

The DMA establishes quantitative thresholds and penalties for companies that dominate core platform services.
It seeks to create a level playing field for smaller and emerging players to compete based on the merit of their products and services.
Consumers benefit from increased access to options and potentially lower service prices through enhanced competition and de-exclusivity.

Companies with substantial dominance in ‘core platform services’ are designated as ‘gatekeepers.’
These services include app stores, search engines, social networks, messaging services, video-sharing platforms, virtual assistants, web browsers, cloud computing, operating systems, online marketplaces, and advertising services.

To be considered a ‘gatekeeper,’ a company must meet specific criteria:
Annual turnover of at least €7.5 billion in each of the last three financial years in the EU.
An average market capitalization of at least €75 billion in the last financial year.
At least 45 million monthly active users in the EU.
Over 10,000 annual active business users in the last financial year.
Sustained meeting of these criteria for the past three financial years.
Proportional obligations may apply if a non-gatekeeper company reaches these thresholds in the future.

Non-compliance can result in fines of up to 10% of the company’s annual revenue from global operations, potentially increasing to 20% for repeated infringements.
Violations may also lead to periodic penalty payments of up to 5% of daily worldwide turnover.
For systematic infringements, additional remedies can be pursued, including the forced sale of a business or essential parts, restrictions on acquisitions, or other measures.

‘Gatekeepers’ must not favour their services over third-party offerings on their platforms.
Interoperability with similar services is required.
Businesses must have access to user data generated on the platform, preventing unfair advantages.

‘Gatekeepers’ must allow users to easily unsubscribe from core platform services.
They cannot pre-install default software with the operating system.
Businesses can use alternative in-app payment systems, and users can download alternative app stores.

Interoperability is crucial for messaging services, allowing users to send and receive messages across competing platforms.
Text message interoperability starts immediately, group messaging within two years, and audio or video calls within four years.
Users of non-gatekeeper companies can choose whether to enable interoperability.

Critics argue that interoperability could compromise end-to-end encryption, which is essential for security and privacy.
Sharing user data may hinder targeted advertising and affect competitive success.
Some fear that the ‘gatekeeper’ threshold may discourage innovation due to compliance requirements.
Restrictions on acquisitions may disrupt start-up lifecycles, reducing exit prospects for entrepreneurs.
The trade-off between innovation and compliance could deter companies from pursuing ‘gatekeeper’ status.

The European Union’s Digital Markets Act (DMA)