Antitrust Law Daily Wrap Up, ANTITRUST NEWS: DMA rules for gatekeepers Apple, Alphabet, Meta, Amazon, Microsoft and ByteDance kick in today, (Mar 7, 2024)

By Peter Reap, J.D., LL.M.

The DMA Gatekeepers are required to prove their effective compliance with the DMA and outline the measures undertaken in compliance reports, as of today.

The six gatekeepers—Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft—designated as such under the Digital Markets Act (DMA), are required, as of today, to prove their effective compliance with the DMA and outline the measures undertaken in compliance reports, the European Commission (EC) announced. The public version of these reports is accessible on the EC's dedicated DMA webpage. As of today, the designated gatekeepers must submit to the EC an independently audited description of techniques used for profiling consumers, along with a non-confidential version of the report. Relatedly, the U.S. Chamber of Commerce issued a statement on the gatekeeper implementation, and videogame developer Epic Games continued its feud with Apple by publicly calling out the iPhone maker for what it called a “serious violation” of the DMA.

The EC will now carefully analyze the gatekeeper compliance reports and assess whether the implemented measures are effective in achieving the objectives of the relevant obligations under the DMA, it said. The assessment will also be based on the input of interested stakeholders, including in the context of the compliance workshops, where gatekeepers are invited to present their solutions. The EC added that it will not hesitate to take formal enforcement action, using the entire toolbox at its disposal to fully enforce the DMA.

As a result of gatekeeper regulation, business users in the EU that depend on services offered by the six gatekeepers to reach their customers will enjoy new opportunities beginning today, the implementation announcement touted. For instance, business users will be able to (1) benefit from fair treatment and a level playing field when in competition with gatekeeper services on their platforms; (2) request interoperability with gatekeepers' services; and (3) sell their apps through alternative channels other than the gatekeeper's app stores. End users will also begin to benefit from more choice and innovation. They will be able to: (1) reclaim their power to choose and not be locked into gatekeepers' default app store and services choices; (2) gain better control over their data; and (3) use alternative electronic identification or in-app payment services.

Vestager comments. Margrethe Vestager, Executive Vice-President in charge of competition policy, stated: “Today, the Digital Markets Act kicks in for all the gatekeepers we have designated half-a-year ago. Our new set of rules will now make online markets more open and contestable for small, innovative businesses to also get a fair chance of making it. And as consumers we will have more affordable options online. This will deeply change how online markets work and open up the digital marketplace, for the benefit of all European players, and users.”

DMA background. The DMA, together with the Digital Services Act, form a single set of rules that apply across the whole EU to create a safer digital space where the fundamental rights of users are protected and to establish a level playing field for businesses. The DMA aims to ensure contestable and fair markets in the digital sector and to that end designates and regulates gatekeepers, which are large digital platforms that provide an important gateway between business users and consumers, whose position can grant them the power to create a bottleneck in the digital economy.

On September 5, 2023, the EC designated six gatekeepers - Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft – and 22 of their core platform services. Following their designation, gatekeepers had six months to comply with the full list of obligations under the DMA, offering more choice and more freedom to end users and business users of the gatekeepers' services. On February 12, 2024, the EC closed four market investigations after finding that Apple and Microsoft should not be designated as gatekeepers for the following core platform services: Apple's messaging service iMessage, Microsoft's online search engine Bing, web browser Edge and online advertising service Microsoft Advertising.

U.S. Chamber of Commerce knocks DMA. According to U.S. Chamber Senior Vice President of International Regulatory Affairs & Antitrust Sean Heather, who issued a statement ahead of the March 7 gatekeeper implementation by the EC, saying in part:

The Digital Markets Act (DMA) prioritizes regulation over innovation. This regulation ends up managing competition rather than promoting it, potentially stifling the emergence of future competitors. Under the DMA, 'gatekeepers’ will be required to provide better terms of access to their platform. This will likely lead to these firms becoming more essential, not less.

Epic Games alleges DMA violation by Apple. The bitter feud between Epic Games and Apple continues, as Epic announced that Apple has terminated the Epic Games Sweden AB developer account. Now, says Epic, we cannot develop the Epic Games Store for iOS. This is a “serious violation” of the DMA and shows Apple has no intention of allowing true competition on iOS devices.

The DMA requires gatekeepers like Apple to allow third-party app stores, like the Epic Games Store, according to Epic. Article 6(4) of the DMA says: “The gatekeeper shall allow and technically enable the installation and effective use of third-party software applications or software application stores using, or interoperating with, its operating system and allow those software applications or software application stores to be accessed by means other than the relevant core platform services of that gatekeeper.”

The DMA was designed to eliminate the very power imbalance that Apple is proving exists today, continued Epic: they claim to have total control to block competing stores and apps. The company vowed to continue to fight to bring true competition and choice to iOS devices in Europe and around the world.

Companies: Epic Games; Alphabet; Amazon; Apple; ByteDance; Meta; Microsoft

News: Antitrust GCNNews