Seems like there’s a bit of a kerfuffle brewing over in the tech world. It turns out that not all big tech companies like being labeled as “gatekeepers,” especially under the European Union’s new rules, the Digital Markets Act (DMA). Word on the street is that Apple and Microsoft, two of the biggest names in tech, are bending over backward to ensure their services, iMessage and Bing, aren’t caught up in this new net. So, why all the fuss? In essence, this DMA thingamajig aims to level the playing field in the tech industry by clipping the wings of mega-internet platforms that might be dominating a tad too much. It’s a move designed to stir up competition and put a stop to any monopoly-style shenanigans. But get this – Apple and Microsoft are whispering behind closed doors that their services don’t quite fit into what DMA defines as a large online platform.
Apple Challenges Classification of iMessage
Apple has thrown down the gauntlet, arguing that its hugely popular iMessage service should not be labeled as a gatekeeper platform, according to insider info reported by the Financial Times. Apparently, Apple’s case hinges on the notion that iMessage doesn’t check all the boxes set out by the DMA for the gatekeeper tag. To hitch a ride in the “gatekeeper” league, a service must boast over 45 million monthly eagles-on-standby (read: active users) within the EU, along with an annual cash flow north of €7.5 billion or a staggering market cap above €75 billion.
Debate Over User Numbers
Apple’s claim raises questions about the number of monthly active users iMessage actually boasts in the European Union. While iMessage is a preinstalled app on all iPhones sold and is widely used, Apple does not publicly disclose its monthly active user figures. Competing messaging apps like WhatsApp hold a stronger presence in Europe, making it unclear whether iMessage meets the user threshold set by the DMA.
If iMessage were to be classified as a gatekeeper service, Apple would be required to open its platform to third-party messaging services, thereby fostering competition. Nonetheless, the firm’s position implies that they consider iMessage’s appeal in the EU to be just not quite enough to deserve this type of categorization. Given that there are more than a billion iPhones being used all over the world, with a hefty slice of the European smartphone pie, just how many people are actually using iMessage is still a hotly debated topic.
Microsoft’s Defense of Bing
Parallelly, Microsoft is reportedly putting forth a similar argument for its search engine, Bing. The company is asserting that Bing’s market share is too modest to warrant categorization as a gatekeeper under the DMA. Microsoft claims that Bing holds a mere 3% market share, a figure it believes exempts the search engine from the gatekeeper criteria.
Gatekeeper Regulations and Impending List
The DMA regulations stipulate that designated gatekeeper platforms must adhere to a range of interoperability and competition rules. The European Commission is set to publish a list of designated gatekeepers on September 6th, revealing both overall companies and specific services subject to the new regulations. Companies included on the list will have six months, until March 2024, to comply with the DMA’s regulations.
Potential Effects on Tech Landscape
The outcome of these discussions has the potential to reshape the European tech landscape. If iMessage and Bing are not classified as gatekeeper services, it could influence the competitive dynamics within their respective markets. Furthermore, Apple’s stronghold on the US market, largely due to iMessage’s integration with iOS, could be maintained without the pressure to open up to rival platforms.
As the European Commission prepares to unveil its list of designated gatekeepers, tech giants Apple and Microsoft are waging private battles to exclude their services, iMessage and Bing, from the new DMA regulations. Their arguments, centered on user numbers and market share, will ultimately shape the regulatory environment for tech companies operating within the European Union. The decisions made by the European Commission will have far-reaching implications for competition, innovation, and market dynamics in the tech industry. Click here to read more.