Big Tech companies are coming out of the woodwork to challenge the European Commission’s new enforcement regime for digital competition with TikTok and Meta Platforms filing legal appeals this week.
Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft are all considered “gatekeeper” companies under the Digital Markets Act (DMA), the European Union’s new digital rulebook, for 22 core online services they run — everything from app stores and social networks to messaging services and online marketplaces.
Meta on Wednesday was the first to say it had filed a legal challenge to the EU’s revamped enforcement regime before the European Union’s General Court, disputing EU officials’ decision to bring its Marketplace and Messenger services in scope of the new digital competition rulebook.
TikTok’s owner ByteDance on Thursday argued its video-sharing platform was wrongly labeled as a social network under the new law. The firm also took issue with being targeted as a digital giant when it sees itself as a challenger to the other “gatekeeper” companies that have a vast ecosystem of digital services.
The six targeted firms had until November 16 to file their legal paperwork. Some already indicated that they aren’t happy with the new labels the Commission has given them, according to filings published online in recent weeks.
Already some companies are making changes to how they run their businesses in Europe. Facebook and Instagram will offer paid ad-free subscriptions in the EU. Google has been opening up data sharing as part of German and Italian antitrust cases.
Their other option is to convince European Union judges to overturn the Commission’s decisions.
But we don’t understand!
Companies designated as gatekeepers can ask the EU’s General Court to cancel individual decisions. That’s precisely what Meta and TikTok did in their filings Wednesday.
Alfonso Lamadrid, a partner at law firm Garrigues, said they could claim that they don’t understand why certain services were caught by the law and that EU officials failed to give “sufficient reasoning.”
They could also file appeals — either now or later — on the Commission’s probes to determine whether Apple’s iMessage, along with Microsoft’s Bing search engine, its Edge web browser and its advertising service, should be considered core platform services. There’s a February 6 deadline to wrap those up. Another probe into Apple’s iPadOS has until September 6 next year.
Lamadrid — who has worked with Google on antitrust challenges including the tech giant’s recent court appeal against an antitrust fine for its shopping service — said he doesn’t think Big Tech firms “will be taking the decision to appeal very lightly.”
The Commission “respects companies’ right to appeal and will defend its decisions in court,” said spokesperson Lea Zuber. “In parallel, we will continue our work with all gatekeepers towards effective implementation of the DMA” by March 7, she said.
Who might grumble?
Meta and TikTok aren’t the only gatekeepers unhappy with the Commission’s decisions so far.
Apple previously argued with the Commission that its services shouldn’t be subject to the new rules, according to the Commission documents.
Apple tried unsuccessfully to convince officials that its App Store comes in five separate versions for different devices and that its Safari browser in three, which would reduce the number of active users for each service. Apple didn’t respond to a request for comment.
ByteDance told the Commission earlier that its viral video app is “about content discovery, not about establishing or maintaining real-world connections,” according to an EU decision published last month.
Telecoms companies are also unhappy. They told the Commission it should designate Apple’s iMessage as a core platform service that needs to follow DMA curbs, according to a letter to Internal Market Commissioner Thierry Breton seen by POLITICO.
What are the others saying?
Microsoft is classified as a gatekeeper for its social network LinkedIn and Windows PC operating service. Microsoft spokesperson Robin Koch said in September that the tech giant “accepts our designation as a gatekeeper under the Digital Markets Act and will continue to work with the European Commission” to meet its obligations.
Alphabet — which has eight core platform services targeted under the DMA, including Google Search and web browser Chrome — said in September it will “work closely with the European Commission and other stakeholders” and would “make changes that meet the new requirements while protecting the user experience.”
Amazon’s marketplace and advertising businesses were both labeled as core platform services under the DMA in September. The company said at the time it is “committed to delivering services that meet our customers’ requirements within Europe’s evolving regulatory landscape” and would “work constructively with the European Commission as we finalize our implementation plans.”
Amazon earlier this year did challenge another digital label in the EU, asking a court to cancel the Commission’s declaration that it was a Very Large Online Platform.
But with just four months to go now until the rules are enforceable, any challenge could just poke the bureaucratic bear.
“This is now an important moment in time for compliance,” Lamadrid said, “so it’s not ideal to have pending court proceedings while you’re trying to negotiate with the Commission on compliance… I don’t think it’s in the company’s best interest to antagonize the Commission.”
This article was updated on November 16 to include recent developments and to add Commission comment.
