The EU’s new tech rules, known as the Digital Markets Act (DMA), have exempted Apple’s iMessage and Microsoft’s Bing, Edge, and Microsoft Advertising from being classified as gatekeepers, after the companies appealed their initial designation. The DMA, which will take effect in three weeks, aims to curb the power of Big Tech and promote fair competition and consumer choice in digital markets.

What is the DMA and who are the gatekeepers?

The DMA is a new set of regulations that targets large online platforms that have significant power over users and rivals, and labels them as gatekeepers. The gatekeepers are subject to stricter rules and obligations, such as allowing third-party apps or app stores on their platforms, making it easier for users to switch to competitors, and not favouring their own services over others.

The DMA was enacted in August 2023, after years of debate and consultation, and is part of the EU’s broader digital strategy to create a single market for digital services and products. The DMA is expected to affect six companies initially: Apple, Microsoft, Google, Amazon, Meta Platforms, and ByteDance.

Why did Apple and Microsoft appeal their gatekeeper status?

Apple and Microsoft were initially labelled as gatekeepers for some of their specific services, such as iMessage, Bing, Edge, and Microsoft Advertising. However, both companies challenged the EU’s assessment, arguing that their services did not meet the criteria for gatekeeper status, and that they faced strong competition in the market.

Apple claimed that iMessage was not an important channel for businesses to reach users in the EU, and that its usage was negligible compared to other messaging apps, such as WhatsApp, Telegram, and Signal. Apple also said that iMessage was not a standalone service, but an integrated feature of its devices, and that users could easily use other messaging apps on its platform.

Microsoft argued that Bing, Edge, and Microsoft Advertising were not dominant in the market, and that they operated as challengers to Google’s search engine, browser, and advertising services. Microsoft also said that its services were not essential for business users to access end-users, and that users could easily switch to other services on its platform.

How did the EU Commission rule on the appeals?

After a five-month investigation, the EU Commission ruled in favour of Apple and Microsoft, and cleared them of being gatekeepers for the services they appealed. The EU Commission said that it made a thorough assessment of all arguments, taking into account input from relevant stakeholders, such as other tech companies, consumer groups, and regulators.

The EU Commission said that it found that iMessage, Bing, Edge, and Microsoft Advertising did not qualify as gatekeeper services, based on the criteria of the DMA, such as market size, user base, intermediation role, and network effects. The EU Commission also said that it did not find evidence of anti-competitive behaviour or harm to consumers or rivals from these services.

However, the EU Commission said that Apple and Microsoft remained designated as gatekeepers for other services, such as operating systems, app stores, and social networks, and that they would have to comply with the DMA rules and obligations for those services.

What are the implications of the EU Commission’s decision?

The EU Commission’s decision means that Apple’s iMessage and Microsoft’s Bing, Edge, and Microsoft Advertising will not face the stricter regulations and obligations under the DMA, such as forced interoperability, data sharing, or non-discrimination. This could give them more flexibility and autonomy in developing and offering their services, and also avoid potential fines or sanctions for non-compliance.

However, the EU Commission’s decision also sets a precedent for how the DMA will be applied and enforced, and raises questions about how other tech companies might challenge or appeal their gatekeeper status in the future. It also potentially weakens the DMA’s impact and effectiveness in regulating the digital markets, especially in areas such as messaging and search, where competition and consumer choice are crucial.

The EU’s new tech rules, known as the DMA, have exempted Apple’s iMessage and Microsoft’s Bing, Edge, and Microsoft Advertising from being classified as gatekeepers, after the companies appealed their initial designation. The DMA, which will take effect in three weeks, aims to curb the power of Big Tech and promote fair competition and consumer choice in digital markets.