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Apple and Microsoft, the two most valuable companies in the US, are challenging the classification of their flagship services as “gatekeepers” under new EU legislation aimed at curbing the power of Big Tech.
Brussels is currently engaged in a dispute with Apple over its iMessage chat app and Microsoft’s search engine, Bing. This disagreement precedes the release of the first list of services to be regulated under the Digital Markets Act, which is set to occur on Wednesday.
The legislation introduces new obligations for tech companies, including data sharing, linking to competitors, and ensuring interoperability with rival apps.
For a platform to fall under the regulations, it must have an annual turnover exceeding €7.5bn, a market capitalization above €75bn, and at least 45 million active monthly users in the EU. However, Brussels maintains some discretion in determining whether a platform meets these requirements.
According to insiders, Microsoft disputes the idea that Bing should be subject to the same obligations as its larger rival, Google Search. Microsoft is unlikely to challenge the classification of its dominant Windows operating system as a gatekeeper but argues that Bing holds only 3% of the market and further regulation would place it at a significant disadvantage.
If Bing becomes subject to the new rules, users would have the option to choose alternative search engines, including Google. Microsoft’s advisors argue that this would ultimately boost Google’s market share.
Similarly, Apple contends that iMessage does not meet the user threshold for the regulations and should not be required to allow rival apps, such as Meta’s WhatsApp, on its platform.
Although analysts estimate that iMessage has around 1 billion users globally, Apple has not disclosed any figures in recent years. The decision may depend on how Apple and the EU define the market in which iMessage operates.
The European Commission, as well as Apple and Microsoft, declined to comment.
Under the Digital Markets Act, numerous major US tech companies, including Google, Amazon, and Meta, will have multiple services subjected to regulation. Chinese-owned TikTok will also be included in the list.
Meta’s Instagram and Facebook, as well as Google’s search engine, are expected to be covered by the new rules, which aim to promote competition from European start-ups and open up markets.
Brussels is still deliberating whether iMessage and Bing should be included in the final list. The European Commission may launch an investigation to determine if these services should face the new obligations outlined in the Digital Markets Act.
The designation of services is part of an ongoing process of implementing these significant regulations, which will be fully applicable next spring. The commission anticipates legal challenges in the EU courts in Luxembourg regarding its decisions.
“The Digital Markets Act will introduce new competition to digital markets in Europe, and now it’s up to the commission to ensure its effectiveness,” said Andreas Schwab, the MEP who led the negotiation of the rules.
This is not the first time tech companies have openly challenged the European Commission over digital regulations. German online retailer Zalando and US tech giant Amazon have already taken legal action against the commission, alleging unfair targeting under the Digital Services Act, another piece of legislation aiming to establish new internet policing standards.
These legal disputes between tech giants and EU regulators occur at a time when their alleged anti-competitive behavior is under increased scrutiny. Earlier this year, Brussels threatened to break up Google due to its alleged illegal practices in the adtech space.
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