Apple (AAPL.O) and Microsoft (MSFT.O) have secured an exemption for their iMessage and Bing search engine, respectively, from the European Union’s Digital Markets Act (DMA) regulations.
Following negotiations with antitrust regulators, both companies successfully argued that their services do not function as gateways for businesses to access end-users.
Scheduled to take effect in three weeks’ time, the DMA mandates tech giants such as Microsoft, Apple, Google (GOOGL.O), Amazon (AMZN.O), Meta Platforms (META.O), and ByteDance to permit third-party apps or app stores on their platforms and facilitate easier switching to competitors. Additionally, these companies are prohibited from giving preferential treatment to their own services over competitors.
After a thorough five-month investigation, the European Commission concluded that iMessage, Bing, Edge, and Microsoft Advertising do not meet the criteria to be classified as gatekeeper services. However, the Commission reaffirmed that Apple’s App Store, iOS operating system, and Safari browser, along with Microsoft’s LinkedIn social network and Windows operating system, will retain their gatekeeper status.
While the Commission did not disclose specific details of the companies’ arguments, Apple asserted that iMessage usage within the EU is minimal compared to competing messaging platforms, emphasizing that it is not a critical channel for businesses to engage with users in the region. According to an Apple spokesperson, consumers have easy access to various messaging apps, enabling seamless switching between them.
Similarly, Microsoft contended that Bing, Edge, and Microsoft Advertising operate as challengers in the market and have relatively modest market share, thereby not serving as significant gateways for business users. The company expressed its commitment to ongoing engagement with the Commission and the industry to ensure compliance with DMA regulations on its other designated platforms.
Antitrust expert Lazar Radic commended the Commission for considering market realities and avoiding arbitrary labeling of iMessage as a gatekeeper solely based on quantitative thresholds. Radic suggested that this approach reflects the Commission’s ability to refrain from excessive regulation.
However, the Coalition for Open Digital Ecosystems (CODE), which includes members like Google, Meta Platforms, and Qualcomm (QCOM.O), disagreed with the Commission’s decision to exempt services like iMessage. The CODE argued that the decision undermines the objectives of the DMA and its potential to enhance choice and competition for European consumers.
In light of these developments, ongoing dialogue and scrutiny surrounding the regulation of digital markets are likely to persist as stakeholders seek to balance innovation, competition, and consumer welfare within the rapidly evolving digital landscape.