Big Tech’s core businesses face overhaul under EU tech rules

By Supantha Mukherjee

STOCKHOLM (Reuters) – The EU Commission on Wednesday designated 22 services of six major tech companies as “gatekeepers” of online services providing messaging to video sharing in its latest crackdown on Big Tech.

The firms are Alphabet (NASDAQ:), Amazon (NASDAQ:), Apple (NASDAQ:), Meta, Microsoft (NASDAQ:) and TikTok owner ByteDance.

A list of dos and don’ts set out in the European Union’s Digital Markets Act (DMA) will force the sector to radically reshape its core business practices, a move which may encourage similar steps in other countries.

Under the DMA, which came into force in November, companies with more than 45 million monthly active users and a market capitalisation of 75 billion euros ($82 billion) are considered gatekeepers providing a core platform service.

Businesses labeled as such will be required to make their messaging apps interoperate with rivals and let users decide which apps to pre-install on their devices.

Alphabet’s Google had the highest number of services, including Android operating system, Maps and Search, to face tougher rules. Meta’s Facebook (NASDAQ:), Instagram, Marketplace and WhatsApp also qualified as gatekeepers.

“While gatekeepers have six months to demonstrate their compliance with their obligations, they must immediately appoint a compliance officer in place, directly reporting to the Board, and inform the Commission of any planned merger or acquisition,” EU industry chief Thierry Breton said on Tuesday.

Companies can be fined up to 10% of their annual global turnover for DMA violations.

Alphabet’s Gmail, Microsoft’s Outlook and Samsung (KS:)’s browser were exempted after the companies provided sufficiently justified arguments showing that these services do not qualify as gatekeepers, the Commission said.

“Over the last few months we have been working to meet the new requirements of the Digital Markets Act and we will now review today’s designation decision in full,” said Oliver Bethell, director of legal at Google.

The Commission has also opened four market investigations to further assess Microsoft’s and Apple’s submissions that some of their core platforms such as Bing, Edge and Microsoft Advertising, and Apple’s iMessage services do not qualify as gateways.