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America’s most valuable companies, Apple and Microsoft, argue that some of their flagship services aren’t popular enough to be designated “gatekeepers” under landmark new EU legislation aimed at curbing the power of big tech.
Brussels’ fight with Apple over its iMessage chat app and Microsoft’s search engine Bing comes ahead of Wednesday’s publication of the first list of services regulated under the Digital Markets Act.
The legislation imposes new responsibilities on tech companies, including sharing data, connecting with competitors and enabling their services to interoperate with rival apps.
A platform needs to have an annual turnover of more than 7.5 billion euros, a market capitalization of more than 75 billion euros, and 45 million monthly active users in the EU to comply, although Brussels has some discretion to designate beyond these original metrics.
Microsoft rejected the notion that Bing should have the same obligations as its much larger rival, Google Search, two people with direct knowledge of the matter said.
Microsoft is unlikely to contest the gatekeeper status of its Windows operating system, which dominates the PC industry, these people said. But the company argues that Bing’s market share is only 3%, and that further legal scrutiny would put it at an even greater disadvantage.
If subject to the new rules, Bing would need to offer users a choice of other search engines, including Google. That could end up boosting Google’s market share, the consultants argued in Microsoft’s defense.
Separately, Apple argued that iMessage did not meet the user thresholds for the applicable rules and therefore should not comply with obligations, including opening the service to rival apps such as Meta’s WhatsApp, these people said.
Analysts estimate that iMessage, which is built into every iPhone, iPad and Mac, has as many as 1 billion users worldwide, but Apple hasn’t disclosed any numbers for years. That decision could depend on how Apple and the EU define the markets in which iMessage operates.
The European Commission, Apple and Microsoft all declined to comment.
Multiple services of all major U.S. tech companies, including Google, Amazon and Meta, will be regulated by the DMA, the people said. China-owned TikTok will also be on the list.
Meta’s Instagram and Facebook, as well as Google’s search engine, are expected to be subject to new rules aimed at opening up markets and boosting competition from European start-ups.
Brussels is still considering iMessage and Bing for the final list. The European Commission may launch an investigation to determine whether these services are subject to the new obligations set out in the DMA.
The designations for these services are part of a long-term process to implement the landmark rules, which will become fully applicable next spring. The commission is ready to respond to a legal challenge to its decision by the EU Court of Justice in Luxembourg.
MEP Andreas Schwab, who is in charge of the rules negotiations, said: “DMA will bring new competition to the European digital market and it is now up to the Commission to make it work.”
This is not the first time tech companies have publicly rebelled against the digital rules of the European Commission and the bloc’s executive arm. German online retailer Zalando and US tech giant Amazon have taken the commission to court, accusing them of being unfairly attacked by the Digital Services Act, the second piece of digital legislation aimed at setting new standards for internet regulation.
The legal battle between the tech giants and EU regulators comes at a time when their alleged anti-competitive practices are under intense scrutiny. Earlier this year, Brussels threatened to break up Google over its alleged illegal practices in ad tech.
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