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Why Apple and Microsoft rail against the Digital Markets Act

8 months ago babelfish

Why Apple and Microsoft rail against the Digital Markets Act

The EU tightening begins on Alphabet, Amazon, ByteDance (TikTok), Meta, Apple and Microsoft pursuant to the Digital Markets Act. But Apple and Microsoft have already started a battle in Brussels for the designation of "gateways" respectively for the iMessage app and the Bing search engine

Raising of shields by Microsoft and Apple in Brussels regarding the new European technological regulations.

Today, the European Commission designated, for the first time, IT companies Alphabet, Amazon, Apple, ByteDance (TikTok), Meta and Microsoft as "gatekeepers" under the Digital Markets Act (DMA). According to the DMA, the press release reads, "the European Commission can designate digital platforms as 'gatekeepers' if they provide an important passage between businesses and consumers, in relation to the basic services of the platform".

In total, 22 core platform services provided by the six companies have been designated, and they will now have six months to ensure full compliance with their DMA obligations for each of the core designated services.

At the same time, the EU executive launched four market surveys to further evaluate comments from Microsoft and Apple, which argue that some of their core platform services do not qualify as "gateways". For Microsoft, we are talking about the Bing, Edge and Microsoft Advertising services, while for Apple, iMessage. Under the DMA, these investigations seek to ascertain whether the rebuttals submitted by the companies demonstrate that the services in question should not be designated as a "gateway".

In fact, as revealed earlier this week by the Financial Times , the two US technology giants are protesting with Brussels to keep iMessage, Apple's messaging app and Bing, Microsoft's search engine, out of the DMA discipline.

All the details.

WHAT THE DIGITAL MARKETS ACT PROVIDES FOR

The designation decisions follow a 45-day review process conducted by the Commission following notification by Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft and Samsung of their potential "gatekeeper" status

According to the DMA, platforms will not be allowed to prioritize their own services over those of competitors. Furthermore, they will be prohibited from merging personal data from different services or using data collected by third-party merchants to engage in competitive practices against them. Not only that, companies will be forced to allow their customers to download apps from rival platforms.

MICROSOFT DOESN'T CONSIDER THAT BING IS COMPARED TO GOOGLE

However, according to the FT report, which cites relevant sources on the matter, Microsoft has rejected the idea that its search engine Bing should adhere to the same standards as Google, its much bigger rival.

Bing has a 3% market share. If governed by DMA rules, Microsoft would have to offer users the option to use other search engines, including Google, the Ft points out. The consultants have argued in Microsoft's defense that this could end up increasing Google's market share.

ALSO APPLE AGAINST DMA ON IMESSAGE

For its part, the Cupertino giant claims that its iMessage messaging app does not have enough users to meet the threshold of the DMA rules, according to the sources of the FT , and as such should not submit to the obligations foreseen such as that of opening the service to competitors such as Meta-owned WhatsApp.

Analysts have estimated that iMessage, built into every iPhone, iPad and Mac, has up to 1 billion users globally, but Apple hasn't disclosed the figures for several years.

THE INVESTIGATIONS LAUNCHED BY THE EUROPEAN COMMISSION

As mentioned at the beginning, the EU Commission has launched four market surveys to further evaluate the observations of Microsoft and Apple. The European executive's investigations should be completed within a maximum of 5 months. Furthermore, the Commission has launched a market investigation to assess whether the iPad operating system, Apple's iPadOS, should also be designated as a "gatekeeper". According to the DMA, this investigation should be completed within a maximum of 12 months.

Furthermore, the Commission has come to the conclusion that, although Gmail, Outlook.com and Samsung Internet Browser meet the thresholds set by the DMA to qualify as "gatekeepers", the companies that own the services (Alphabet, Microsoft and Samsung), have provided sufficient arguments justified evidence that the services in question do not qualify as a “gateway” to the respective main platform services.

THE CONSEQUENCES

Following their designation, gatekeepers will now have six months to comply with the full list of obligations, providing more choice and freedom for end-users and business users of services. The Commission will monitor the effective implementation and compliance with these obligations. In the event that a "gatekeeper" fails to comply with the established obligations, the EU executive can impose fines of up to 10% of the company's total worldwide turnover, which can rise to 20% in the case of repeated violations. In case of systematic violations, the Commission also has the power to take further measures, such as forcing the gatekeeper to sell an asset or parts of it, or forbidding the acquisition of additional services related to systemic non-compliance.

IT'S NOT THE FIRST TIME BIG TECH HAS PROTESTED AGAINST BRUSSELS

Finally, as the FT recalls, this is not the first time that technology companies have openly challenged the Commission on digital rules.

German online retailer Zalando and US tech giant Amazon have already taken the commission to court over allegations that they were unfairly targeted by the Digital Services Act, the second EU regulatory measure imposing stricter rules on the control of digital content.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/apple-e-microsoft-si-scagliano-contro-il-digital-markets-act/ on Wed, 06 Sep 2023 14:38:22 +0000.