Out-Law / Your Daily Need-To-Know

Out-Law News 3 min. read

European Commission closes four Digital Markets Act investigations, separate investigation continues in Germany

Microsoft VP Yusuf Mehdi at Microsoft launch Feb 23 seo

Microsoft VP Yusuf Mehdi, Feb 23. Photo by Jason Redmond via Getty Images

Apple's iMessage and Microsoft's Bing, Edge, and Microsoft Advertising services should not be designated as gatekeeper core platform services under the Digital Markets Act (DMA), the European Commission has announced.

This means that the four services will not be subject to additional competition rules and compliance obligations aimed at the EU activities of gatekeeper digital platforms.

The four Commission decisions, made on 12 February but announced a day later, apply to each of the specific Apple and Microsoft services mentioned above. They do not, however, affect the Commission’s previous designations of Apple and Microsoft, respectively, as gatekeepers in respect of certain other core platform services.

In July 2023, Apple and Microsoft each separately notified the Commission that they met the quantitative thresholds outlined in the DMA for designation as “gatekeepers” in respect of some of their core platform services. In their notifications at the time, Apple and Microsoft, respectively, also made submissions arguing that, despite meeting the DMA designation thresholds, some of their core platform services do not qualify as gatekeepers.

On 5 September 2023, Apple and Microsoft - along with four other digital firms - were designated as gatekeepers.  At that time, three Apple services (App Store, Safari and iOS), and two Microsoft services (LinkedIn and Windows PC), were designated as core platform services under the DMA.  However, on the same date, the Commission also opened four parallel market investigations under the DMA into one additional Apple service (iMessage) and three additional Microsoft services (Bing, Edge and Microsoft Advertising), to further assess whether those services should indeed not be classified as gatekeeper core platform services despite meeting the relevant quantitative thresholds under the DMA. 

Following a thorough evaluation of Apple’s and Microsoft’s respective rebuttal submissions, and incorporating input from relevant stakeholders and advice from the Digital Markets Advisory Committee, the Commission has now concluded that iMessage, Bing, Edge and Microsoft Advertising should not be classified as gatekeeper services under the DMA.

Tadeusz Gielas, competition law expert at Pinsent Masons, said: “These cases mark the first time the Commission had issued decisions under the DMA dealing with gatekeeper attempts to rebut the presumed quantitative designation of certain ‘core platform services’. The Commission’s non-confidential decisions, once published, will provide further important guidance on this new regime including on the Commission’s approach and reasoning when conducting DMA market investigations to assess proposed designations.”

“While this is positive news for gatekeepers, there has been some criticism by stakeholders in response to the Commission’s decisions. The Commission has however noted that it will ‘continue to monitor the developments on the market with respect to these services, should any substantial changes arise’,” Gielas said.

Additionally, on 5 September 2023, the Commission also opened a fifth market investigation under the DMA, to assess if Apple's iPadOS should be designated as a gatekeeper service, despite falling below the DMA’s quantitative thresholds. The Commission’s decision in that investigation is not due until September 2024.

Although the Commission has now concluded its DMA market investigations into Microsoft, a separate investigation into certain Microsoft services, including Bing, by Germany’s Federal Cartel Office (FCO) remains ongoing.

“The German FCO’s procedure to determine whether Microsoft has ‘paramount significance across markets’ within the meaning of the newly created Sec. 19a of the German Act against Restraints of Competition is still ongoing. The proceeding was started in 2023 and covers, among other things, Microsoft’s product Bing,” said Dr. Michael Reich, competition law expert at Pinsent Masons. “The consequences of a finding of ‘paramount significance’ has the same purpose as the finding under the DMA, but operates a bit differently. It enables the FCO to impose certain measures on the undertakings in order to ensure open and competitive markets.”

“The same procedure relating to Apple was completed in April 2023 after the FCO found that Apple had such ‘paramount significance’. Apple has appealed against that decision and the appeal is currently pending before the Düsseldorf Appeals Court,” said Reich.

At the EU level, gatekeepers whose core platform services had already been designated on 5 September 2023, will have to comply with DMA obligations as of 6 March 2024. 

“Other legal challenges under the DMA are pending. For example, TikTok’s parent company, Bytedance, is contesting its designation as a gatekeeper,” Gielas said.

In the UK, a new digital markets competition regime is expected to be formally established during 2024, once the Digital Markets, Competition and Consumers Bill is passed by parliament, with new conduct obligations expected to apply from mid-2025.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.