Elon Musk’s X (formerly Twitter) could be forced to follow a set of strict guidelines in the EU after the European Commission (EC) announced that the platform may be classified as a ‘gatekeeper’ under the Digital Markets Act (DMA).
The EC explained that companies can be subject to additional regulations if they operate what is described as a “core platform service,” including search engines, app stores, and messenger services. They must have over 45 million monthly active end users, more than 10,000 yearly business users, or over €75 billion ($81 billion) in market capitalization.
According to an announcement published on the EC’s website on March 1, X, as well as travel website Booking.com and TikTok owner ByteDance, have submitted notifications that their services potentially meet the DMA thresholds. The commission now has 45 days to decide whether to designate the three companies as gatekeepers. If so, they will have six months to comply with DMA requirements.
Companies that have already received the gatekeeper designation including the likes of Apple, Meta, Amazon, Microsoft, and Alphabet (owner of Google) are required to let third parties inter-operate with their services, allow business users to access the data they generate on the platform, and to let them conclude contracts with their customers outside the gatekeeper’s ecosystem.
At the same time, the targeted companies must also refrain from favoring their own services over competitors or blocking users from removing pre-installed software or apps. They must also seek explicit consent from users to track their activity outside the gatekeeper’s core platform service for the purpose of targeted advertising.
Companies that fail to abide by the EU’s rules may face fines of up to 10% of their total worldwide annual turnover, or up to 20% in the event of repeated infringements. Businesses may also be slapped with periodic penalty payments of up to 5% of their average daily turnover.