BRUSSELS: Tech giants Meta and TikTok are contesting the scope of an EU law that from March will set new rules on competition in the digital marketplace.

The European Commission has designated 22 big online companies as “core platform services” to be subject to additional scrutiny and obligations under the Digital Markets Act (DMA) aiming to crack down on anti-competitive practices.

The list includes familiar brands ranging from social networks Facebook, Instagram and TikTok, to so-called “intermediation” apps such as Google Maps, Amazon Marketplace and Apple’s AppStore, to operating systems iOS, Android and Windows and Google Search.

Six tech titans behind the platforms — US groups Alphabet, Amazon, Apple, Meta and Microsoft, and Chinese group ByteDance — have been labelled “gatekeepers”. The DMA comes after other EU laws aimed at imposing order and rules on the digital world.

As with the Digital Services Act, which came into force in August, and the 2016 General Data Protection Regulation, the DMA comes with sharp teeth.

Companies found infringing the DMA expose themselves to fines that could go as high as 20 per cent of their global turnover, or even orders to be broken up in serious cases.

But the legislation has already been challenged in what is likely to be a foretaste of future litigation and differing interpretations of what it entails.

Meta, owner of Facebook and Instagram, announced on Wednesday it will go to the EU courts over the designation of its instant messenger service Messenger as a “core platform service”, and for its Facebook Marketplace also coming under the DMA’s scope.

“This appeal seeks clarification on specific points of law regarding the designations of Messenger and Marketplace under the DMA,” said a Meta spokesperson.

“It does not alter or detract from our firm commitment to complying with the DMA,” alongside the lawsuit, the spokesperson added.

The group also does not challenge its other services — Facebook, Instagram, Whatsapp and its Meta ads service — coming under the European act.

TikTok on Thursday announced it would challenge its own listing, arguing that it sees itself as an emerging player in a field dominated by American giants.

“Our designation risks undermining the DMA’s own stated goal by protecting actual gatekeepers from newer competitors like TikTok,” the company wrote on its website.

“The designation decision is based on a fundamental misunderstanding of our business and threatens our ability to grow and compete with true gatekeepers.” The companies concerned have until Thursday to lodge a lawsuit.

Published in Dawn, November 18th, 2023