Meta and ByteDance, the parent company of TikTok, have launched a challenge against the gatekeeper status designated to them by the European Commission under the EU's Digital Markets Act.
The DMA came into force in September 2023 and is designed to rein in the power of large tech corporations, requiring them to change how they integrate digital services and handle customer data while also addressing issues including the right to uninstall software on devices, greater personal data access controls, enhanced advertising transparency, an end to vendors self-preferencing their own services, and a stop to certain restrictive app store requirements for developers.
The legislation targets companies with a market capitalization of at least €75 billion ($81 billion) or sales in Europe of over €7.5 billion, at least 45 million monthly users in the EU, and which provide certain applications such as web browsers, virtual assistants, and messaging or social media services.
In September, the EU released a list of 22 so-called gatekeeper services being run by six tech companies — Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft. Under the DMA, the Commission can designate digital platforms as gatekeepers if they provide an important gateway between businesses and consumers in relation to core platform services.
Microsoft and Google have decided to not challenge the designation, while Apple and Amazon have not made any public statement regarding their designation but are reportedly considering their options. The deadline to file an appeal against the gatekeeper status is November 16.
Meta has accepted the designation given to Facebook, Instagram, and WhatsApp but is challenging the decision to give gatekeeper status to its Messenger and Marketplace platforms in a court in Luxembourg.
“This appeal seeks clarification on specific points of law regarding the designations of Messenger and Marketplace under the DMA,” said a spokesperson from Meta. “It does not alter or detract from our firm commitment to complying with the DMA, and we will continue to work constructively with the European Commission to prepare for compliance.”
ByteDance has also started a legal challenge against TikTok’s designation, claiming the EU is wrong to label the platform as a social network. The company has not yet responded to a request for comment.
Gatekeepers have until March 7, 2024, to comply with the full terms of the DMA, during which time they must submit a detailed compliance report that outlines how they will fulfill each of the obligations laid out by the legislation.
If a gatekeeper does not comply with the DMA’s obligations, the Commission can impose fines of up to 10% of the company's total worldwide turnover, which can increase to 20% in case of repeated infringement.
The EU Commission said it has taken note of the appeals and respects companies’ right to appeal but will defend its designation decisions in court.