The DMA Core Platform Challenge: Apple, Microsoft, TikTok, Byte Dance, Google, Facebook, and Google Succeeds to Their Apple Dominance
The ensuing responses from the companies targeted by this legislation have varied wildly. Meta, Apple, Microsoft, and Byte Dance launched appeals against their core platform service designation with the exception of iMessage and Bing. TikTok’s parent company ByteDance, however, failed to stall its designation after complaining that DMA rules would force it to disclose private, highly strategic information.
The European Commission presumes a platform is a gatekeeper if it meets two conditions. It needs to have an average market cap of 75 billion in its last fiscal year and an annual EU revenue of at least 7.5 billion, and it also needs to have a core platform for three EU member states. Second, it must operate a core platform with at least 45 million monthly active users in the EU and more than 10,000 yearly active EU business users in each of the last three fiscal years.
The commission identified specific services for each of the designated gatekeepers that it believes are subject to DMA rules. Gatekeepers that fail to comply with the rules can face fines of up to 10 percent of global revenue, and up to 20 percent for repeat infractions.
Many services linked to each other have aided the power of the empire that stretches from a dominant search engine to a major web browser and popular mobile operating system. That’s given it the widest range of covered services under the DMA:
Changes in January and March affected everything from data sharing to search results for EU users. The highlights include:
Some competitors have been displeased with the proposed changes. The new search changes have been claimed by the online reviews platform to increase the rate at which users will stay within the walled garden. Megan Gray was a counsel for DuckDuckGo who questioned the effectiveness of the choice screens as a vehicle for promoting competition. And Epic CEO Tim Sweeney, whose company is suing Google for antitrust violations in the US, has objected strenuously to its Android payment framework. So we probably haven’t seen the end of questions over Alphabet’s dominance — but it’s staked out its starting ground.
According to Penfrat, Apple should be concerned since there are already several other competitors in a position to challenge Apple’s app store dominance. “Apple makes big money with its app store monopoly, over 85 billion USD per year, hence their particular resistance to meaningful change.”
On January 25th, the company announced that it would be introducing several changes in the iOS 17.4 update to abide by the EU’s new rules, which include:
When its appeal didn’t work, Apple instead chose a different approach. The new rules it announced on January 25th for developers releasing iOS software in the European Union in response to the DMA have, suffice to say, rustled some jimmies.
Companies are not lined up to accept Apple’s offer. Several third-party app marketplaces have been announced, but only one claims it will be available for iPad users at the end of March, right before the Digital Marketing Alliance takes effect. Similarly, while rival web browser providers like Google and Mozilla are seemingly experimenting with new iOS browsers, neither company has officially announced when those apps will be available.
Facebook operator Meta has a long history of absorbing rival social networks and messaging services, as well as a powerful ad platform. These areas hold the majority of the services covered by the DMA.
Targeted advertising is Meta’s bread and butter, and last year it aimed to address concerns by letting users pay to avoid ads — launching a €9.99 per month ad-free tier for Facebook and Instagram, then giving the tier (as of March 1st) A fee is added to linked accounts. It also paused ads for users younger than 18, although its long-term plans there are less clear.
The choice to lean on a paid option resulted in a lawsuit from the European Consumer Organisation (BEUC), which claimed the “very high subscription fee” meant users “do not have a real choice.” In January, Meta announced the gradual rollout of some other data protection features, including the ability to sever linked Facebook and Instagram accounts and manage them separately.
But the most exciting change for many people is the prospect of third-party cross-platform messaging, which Meta announced for its WhatsApp service last year. Wired recently outlined what this third-party messaging support might look like for WhatsApp and Messenger, and we expect more details as the DMA takes effect.
Despite appealing its designation, the changes are in the works. It argued that Messenger and Marketplace shouldn’t be included on the list because they were integrated with Facebook and didn’t need Meta to act as a middleman. As of this week’s deadline, the challenge remains ongoing.
The EU’s new competition rules are going live — here’s how tech giants are responding: The case of the U.S.
Amazon’s retail powerhouse is built on a complex data collection system and huge third-party marketplace, which some sellers complain has given it an unfair leg up. The online marketplace and the advertising business are both under the auspices of the Delaware Management Association.
Amazon will give advertisers and publishers with campaigns in the EU new, expanded reports that they can access from their website. The reports contain information on how much advertisers are paying for ads, and how much publishers are getting from ads on a third party website or app. The company is also rolling out a new “clean room” for advertisers with campaigns in the EU, allowing them to “independently verify the success and impact of their campaigns in a privacy-safe, cloud-based environment.”
Microsoft’s Windows operating system falls under the DMA’s regulations, and that’s changing how much the company promotes — or lets users avoid — numerous other apps and services inside it.
The software giant has had to make a range of changes to comply, including adding the ability to disable its built-in Bing web search, offering a new option to uninstall its Edge browser, and even allowing companies like Google to add their own custom web searches into Windows. These options are also available in the EU countries, as well as Iceland, Liechtenstein, and Norway.
ByteDance’s inclusion has a unique political dimension here, cutting against some critics’ arguments that the EU is unfairly targeting American companies. (A second non-US-based company, Samsung, was initially named but later removed from the gatekeeper list.) California Democrat Lou Correa, the ranking member on the US House Judiciary subcommittee on antitrust, led a letter late last year with more than 20 bipartisan colleagues, criticizing the “clear targeting of U.S. companies by EU policies, especially under the DMA.” The European Commission didn’t name Chinese firms despite their aggressive competition with U.S. firms in the EU and other markets.
An analysis of EU rules on app licenses and privacy breaches by TikTok and EDRi, with comments on ByteDance and Penfrat
ByteDance shared a plan for TikTok to comply with the DMA. The platform launched an API that will let European users transfer their data to other apps that have registered with TikTok to use the tool. Registered developers can port posts, followers, and other activity from TikTok to their own apps with users’ permission. TikTok said it’s also improved its “Download your Data” tool that lets individual users export and download their posts and other information. And it will have “enhanced data portability solutions” for business accounts.
TikTok would have had more time to comply if the EU court had not refused to suspend its designation.
The European Commission must approve all of the proposals by the gatekeepers before they can be implemented. In January, an EU commissioner told Reuters that the bloc would take “strong action” if it feels the solutions being proposed aren’t good enough.
That makes it difficult to gauge how much consumers and smaller competitors actually stand to gain. Jan Penfrat, senior policy advisor at European Digital Rights (EDRi) told The Verge that none of the changes proposed by gatekeepers “have led to any meaningful change to the power structures that help keep those companies at the top,” though he notes that some actions will take time to yield results. There is a chance that allowing people to remove Google applications from their phones will aid smaller providers, though it remains to be seen.
That might be fine for apps with a limited number of users, but those fees can add up quickly if they become victims of their own success. An example given by David Heinemeier Hansson is that Meta would need to pay an Apple price of 135 million dollars annually to host a competitor app store for its photo sharing service.
Apple’s decision to reopen its browsers in the EU has made Fidelity back to Europe, according to Yis Varoufakis
Apple previously decided to drop support for progressive web apps (PWAs) in the EU, going as far as to blame the DMA. The company walked away from a decision to face an investigation from the EU. PWAs will continue to exist — though they’ll have to be built on WebKit, the engine used by Safari. As one of its responses to the DMA, Apple is allowing third-party browsers to use their own engines in iOS in the EU. But PWAs downloaded through those browsers will still be reliant on Safari’s WebKit.
The citizens of Europe are governed by foreign powers on the internet. The majority of the people in the EU use an American search engine, shop on an American site, thumb American phones, and browse through American social media feeds.
The big US tech platforms have brought feudalism back to Europe, according to the book byYanis Varoufakis. The former Greek finance minister doesn’t see any difference between being an Amazon seller and being a medieval serf toiling on land he does not own.