Apple and Microsoft have reportedly reached out to the European Union (EU) to prevent their respective services from ending up on the regulator’s ‘gatekeeper’ list. In case you don’t know, EU’s Digital Markets Act is aimed at reducing monopoly within the tech industry and promote healthy competition. The law is also focused on identifying ‘gatekeepers’, services that can act as a bottleneck to other market participants. While, the EU has not released the list, Alphabet, Apple, Google, Meta, Microsoft and others are expected to make the list.
Financial Times is now reporting that both Apple and Microsoft want to get a head start in arguing their position to ensure they don’t end up on the list. The EU is expected to release the ‘gatekeeper’ list this Wednesday and the basic criteria is an “annual turnover of more than €7.5bn, a market cap above €75bn, and active monthly users in the EU of 45mn”.
Microsoft has argued that allowing Bing users the option of Google will further boost Google’s market share in an industry where Bing only holds 3 percent of the market share. Microsoft has further pushed back on the idea that Bing “should be subject to the same obligations placed on its much larger rival, Google Search”.
If covered by the new rules, Bing would need to give users a choice of other search engines, including Google’s. Advisers have argued in Microsoft’s defence that this could end up boosting Google’s market share.
According to sources, Microsoft is unlikely to argue its position as a gatekeeper for Windows, which dominates the PC industry.
Microsoft was unlikely to dispute the designation of its Windows operating system, which dominates the PC industry, as a gatekeeper, these people said.
Apple has also joined Microsoft in defending its iMessage service. The company has argued that iMessage does not meet the user threshold and as such should not be put under the same list as Meta’s WhatsApp.
Separately, Apple argued that iMessage did not meet the threshold of user numbers at which the rules applied and therefore should not comply with obligations that include opening the service to rival apps such as Meta’s WhatsApp, said the two people.
Analysts have estimated that iMessage, which is built into every iPhone, iPad and Mac, has as many as 1bn users globally, but Apple has not disclosed any figures for several years. The decision is likely to hinge on how Apple and the EU define the market in which iMessage operates.
Even if Microsoft and Apple manage to keep Bing and iMessage respectively, off the list, there is a good chance that other parts of their businesses will be put on the EU’s list. The regulator is still unsure on whether Bing and iMessage should be included. Microsoft recently confirmed that it will unbundle Teams from Microsoft 365 and Office 365 in the EU in an attempt to keep Teams off the list. The tech giant will also now allow system apps to open via the default browser of user choice, at least on Insider builds.