March 6 marks a long-awaited moment of change: it is the deadline for the tech industry's biggest gatekeepers to comply with the European Union's Digital Markets Act (DMA). The DMA requires high-performing companies to enable greater interoperability and avoid favoritism for their own digital services. It has led to disputes over which services should be included, sparked excitement among smaller competitors and led to changes in the way companies handle fundamental parts of their business. And in March 2024, the rules will come into force after years of debate.
The EU has designated six companies as gatekeepers, which it defines as large digital platforms that provide “core” services such as app stores, search engines and web browsers. The DMA's restrictions apply to specific services within these companies: Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft. Here's what everyone has done to meet these demands – and combat them.
What does the DMA require?
By March 6, the six designated gatekeepers must comply with the DMA rules for the 22 covered services identified by the European Commission. By March 7, these companies must submit compliance reports to the EU explaining how they intend to comply with the rules. European officials will later assess these plans in workshops with each of the covered companies.
More generally, certain platforms need to take proactive measures that the EU believes will make digital markets fairer and more open. For example, gatekeepers must allow third-party companies to collaborate with their services, they cannot favor their own products in rankings over those of competitors, and they cannot make app store access for third-party developers conditional on using their payment systems or other services.
What is a Gatekeeper?
The European Commission considers a platform to be a gatekeeper if it meets two conditions. First, it must have an annual EU turnover of at least 7.5 billion euros in each of the last three financial years or an average market capitalization of 75 billion euros in the last financial year, while making its core platform available to at least 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 annual active EU business users in each of the last three financial years.
The Commission has identified specific services for each of the designated gatekeepers that it considers to be subject to the DMA rules. Gatekeepers who do not follow the rules can face fines of up to 10 percent of global sales, and up to 20 percent for repeat violations.
How does each gatekeeper respond?
alphabet
Alphabet has a sprawling empire, ranging from a dominant search engine to a major web browser to a popular mobile operating system, with many services linked together to increase their power. This means it has the broadest range of services covered under the DMA:
- Google Play
- Google Maps
- Google Shopping
- Google search
- Youtube
- The Android operating system
- Alphabet's online advertising system
- Google Chrome
As a result, the company announced a series of changes in January and March that affect everything from data sharing to search results for EU users. Highlights include:
- Choice screens – one to select a default browser on Android devices and one to select a default search engine in the cross-platform Chrome browser – are coming to the European Economic Area (EEA) after March 6th.
- More links to competing sites when you search Google for things like flights and hotels, including a dedicated section for comparison sites. Google will also remove some of its own widgets, such as the Google Flights box.
- An opt-out of some data sharing across YouTube, search, advertising services, Google Play, Chrome, Google Shopping and Google Maps. Users' decisions will take effect on March 6th.
- A new data portability API for developers, built on top of the Google Takeout service, allowing users to move data from Google services.
- The option for Play Store app developers to redirect EEA users outside of their apps to promote alternative payment offerings, part of a broader overhaul of Android payments in Europe.
The company has long been a target of EU antitrust attacks, and some of these changes reflect previous concessions. Chrome on Android, for example, already offered search engine selection screens following a previous lawsuit.
Alphabet's proposed changes have sparked resentment among certain competitors, particularly smaller, specialized search platforms. Online review platform Yelp recently claimed that the search changes not only “violated the DMA's ban on self-preferencing, but actually increase the rate at which users stay within Google's walled garden,” said Megan Gray, a former attorney for rival search engine DuckDuckGo , has called into question the entire concept of choice screens as an effective tool for promoting competition. And Epic CEO Tim Sweeney, whose company is suing Google for antitrust violations in the US, has done so protested vigorously to its Android payment framework. So we probably haven't seen the end of questions about Alphabet's dominance yet – but the company has staked out its baseline.
Apple
Apple is one of the most prominent DMA targets thanks to its expansive mobile walled garden. The iOS operating system, the Safari web browser, and the App Store are all referred to as “core platform services,” and much of the discussion has been about how wide they need to be opened up.
On January 25, the company announced that it would introduce several changes in the iOS 17.4 update to comply with new EU rules, including:
- Allows iOS apps to be distributed through third-party marketplaces, undermining the Apple App Store's monopoly over iPhone apps.
- A new framework and APIs that enable third-party marketplace developers to manage app installations and updates.
- Support for third-party browser engines that aren't based on WebKit, the engine that powers Apple's own Safari browser, and a new prompt screen that encourages iOS users to choose a default browser.
- Opening the iPhone's NFC systems to enable the use of contactless payment services in banking and wallet apps in addition to Apple Pay.
This does not mean that these changes are made voluntarily. Apple has fiercely contested its services falling under the DMA, arguing that rather than a single platform, it actually operates five separate app stores (which would conveniently be small enough to avoid the EU regulation). Although this move was unsuccessful, it did convince the EU Commission that iMessage did not qualify as a gatekeeper service, thereby circumventing requirements to make it interoperable with other messaging platforms.
The changes rolling out to European users in iOS 17.4, particularly support for third-party app stores, are intended to address long-standing complaints about Apple's insular ecosystem. But numerous developers and critics have called them inadequate or even “malicious compliance.” Apple's new rules require App Store alternatives to either pay a core technology fee of €0.50 (~54 cents USD) for apps with more than 1 million downloads or adhere to the 15 to 30 percent cut that the company offers currently collects.
Given this, companies are not exactly ready to accept Apple's offer. A handful of third-party app marketplaces have been announced by Epic, MacPaw and Mobivention, but only the latter claims it will be available to iOS users on March 7, right after the DMA takes effect. Although rival web browser vendors like Google and Mozilla appear to be experimenting with new iOS browsers, neither company has officially announced when these apps will be available.
Meta
Facebook operator Meta has a long history of acquiring competing social networks and messaging services as well as a powerful advertising platform. The services covered by the DMA focus on these areas:
- Facebook Marketplace
- delivery boy
- Meta ads
Targeted advertising is Meta's bread and butter, and last year the company aimed to address concerns by allowing users to pay to avoid ads – by offering a €9.99 per month ad-free tier for Facebook and Instagram introduced and then (from March 1st) an additional fee for linked accounts. It also paused ads targeting users under 18, although long-term plans there are less clear.
The decision to rely on a paid option led to a lawsuit from the European Consumer Organization (BEUC), which claimed the “very high subscription fee” meant users “had no real choice.” In January, Meta announced the gradual rollout of a few more privacy features, including the ability to unlink 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 last year for its WhatsApp service. Wired recently laid out what this third-party messaging support might look like for WhatsApp and Messenger, and we expect more details once the DMA goes into effect.
These changes are in the works, although Meta has appealed some parts of its gatekeeper designation. In November, it was argued that Messenger and Marketplace did not belong on the list because the former was an integrated Facebook feature and the latter was a consumer-to-consumer service where Meta does not act as an intermediary. As of this week's deadline, the challenge remains.
Amazon
Amazon's retail power is based on a complex data collection system and a massive third-party marketplace that some say gives sellers an unfair advantage. It has two services that fall under the DMA: its online marketplace and its advertising business.
The e-commerce giant has detailed some of the changes it is making to the way companies manage their ads and how customers control them. The company has already started asking customers who visit its EU store for permission to collect their data for personalized ads. As noted on this support page, acceptance or rejection of these Terms affects Amazon's ability to provide information about its entertainment services, including Amazon Prime Video, IMDb and Twitch, as well as its smart home devices, Kindle e-commerce Collect readers and app stores, operating systems and Fire tablets. This could make it more difficult for Amazon to sell and display personalized ads to users in the EU.
Additionally, Amazon has committed to providing advertisers and publishers with campaigns in the EU with “new, enhanced reports” that they can access via Amazon’s website. These reports provide more detailed information about how much an advertiser pays for ads and how much a publisher receives from ads displayed on a third-party website or app. The company is also launching 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.”
However, Amazon has not yet detailed what kind of changes – if any – it is making to ensure its marketplace promotes competition under the DMA. The rules could mean the company can't give its brands preferential treatment in search results or copy third-party products, something Amazon has been accused of doing in the past. And Amazon has long been the subject of antitrust scrutiny in the EU, where regulators accused it of misusing seller data to stay ahead of competitors. The company settled those fees in 2022 and promised to stop using non-public data and make it easier for more sellers to appear in its Featured Listing box (formerly called the Buy Box), where products receive high visibility .
Microsoft
Microsoft's Windows operating system falls under the DMA regulations, and that changes the way the company promotes, or causes users to avoid, numerous other apps and services included within it.
To meet the requirements, the software giant had to make a number of changes, including the ability to disable built-in Bing web search, offer a new option to uninstall its Edge browser, and even allow companies like Google to add their own custom website searches in Windows. These options are available to users in EEA markets – this includes the EU countries as well as Iceland, Liechtenstein and Norway.
Microsoft will allow Windows computers in EEA markets to remove Bing results from Windows Search, potentially allowing Google to list its own search results here instead. Third parties like Google can also add feeds to the Windows Widget board. As part of the DMA rules to make it easier to uninstall pre-installed apps, Windows 11 users can also uninstall the Camera, Cortana, and Photos apps.
All of these changes have already rolled out to computers in the EEA, preparing Microsoft for compliance day. We'll now wait to see if Google decides to release its own add-in for Google search results in the Windows search interface. There could also potentially be a number of Windows widgets providers soon.
The EU initially listed a number of other Microsoft tools as gatekeeper services. But Microsoft successfully appealed Edge, Bing and Microsoft Advertising to be spared from the DMA after regulators agreed with Microsoft's argument that these services did not qualify – Microsoft argues that they are in fact “acting as challengers in the marketplace.” .
Byte Dance
Chinese giant ByteDance is so far the only non-American company designated as a gatekeeper under the DMA, and only has one covered service: the social network TikTok.
ByteDance shared earlier this week how TikTok plans to comply with the DMA. The platform has launched an API that allows European users to 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 into their own apps with users' permission. TikTok said it has also improved its “Download your Data” tool, which allows individual users to export and download their posts and other information. And there will be “enhanced data portability solutions” for business accounts.
However, these changes come as the company challenges its designation as a gatekeeper, claiming that TikTok is, on the contrary, “arguably the most capable challenger to more established platform companies.” She argues that the Commission based its analysis on ByteDance's global market capitalization, which the company says reflects businesses that do not even operate in Europe, and that TikTok itself does not meet the required revenue threshold.
ByteDance's inclusion here has a unique political dimension and runs counter to some critics' arguments that the EU is unfairly targeting American companies. (A second non-U.S. company, Samsung, was initially named but was later removed from the gatekeeper list.) California Democrat Lou Correa, the ranking member on the U.S. House antitrust subcommittee, led a letter late last year with more than 20 non-partisan colleagues criticizing the “clear orientation of EU policy towards US companies, especially within the framework of the DMA”. Lawmakers criticized the fact that the European Commission did not designate Chinese firms such as Huawei, Tencent and Alibaba as gatekeepers “despite the fact that they compete aggressively with U.S. firms in the EU and other markets.”
Adi Robertson, Lauren Feiner, Jess Weatherbed, Tom Warren and Emma Roth contributed to this piece.