EU targets six 'gatekeepers' under its Digital Markets Act

EU regulators name six Big Tech companies — Amazon (AMZN), Apple (AAPL), Google (GOOG, GOOGL), Meta Platforms (META), Microsoft (MSFT), ByteDance — that will be subject to its Digital Markets Act. Yahoo Finance Legal Reporter Alexis Keenan explains these companies' status as "gatekeepers" for certain antitrust behaviors, such as promoting their own products over third-party operators on their respective platforms.

This post was written by Luke Carberry Mogan.

Video Transcript

RACHELLE AKUFFO: Well, big tech companies have a whole new playbook for operating in the EU.

On Wednesday, the EU's competition authority named six companies and 22 of their subsidiaries as quote, "gatekeepers".

Now that changes their rules for competing against smaller firms.

Yahoo Finance's Alexis Keenan has more on that.

So Alexis, what do we know so far?

ALEXIS KEENAN: Hi, Rachelle.

Yeah.

Take a look, we just had it up on the screen there.

The list of these big tech companies that were just revealed today by the European Commission.

That's the antitrust regulator there as gatekeepers.

These six companies-- Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft plus 22 companies totally, including some of their subsidiaries.

They're going to have to overhaul their business models and stop doing some of the practices that have really helped their bottom line over the course of their history Now that's all due to the EU's new Digital Markets Act.

It becomes enforceable in March.

So these companies are going to have to comply by then.

Get their ducks in a row.

And what this law does is it makes it illegal for these companies to do things like favor their own products over other businesses that are using their platforms, also makes it illegal to wall off some of their ecosystems also.

They can't combine user data-- personal user data across their different platforms.

They're going to have to have siloed those off from each other.

So, for example, amazon.com, they're not going to be able to boost their own products over the third-party sellers on that platform.

Meta and WhatsApp-- WhatsApp is going to have to be able to work with other messaging services.

And then you have operating systems in their mobile and otherwise, they're going to have to let in third-party app stores.

They're also going to have to let app developers allow for alternate in-app payment options.

So Microsoft and Apple already asking for some exemptions to this coming law.

The EC is evaluating those requests.

They specifically are for Microsoft, saying that it's bleeding edge and also its advertising arm should be exempt.

As for Apple, it wants its iMessage platform to be exempt.

The company notes and makes a distinction between personal messaging and business messaging and saying that maybe, OK for business messaging, but they don't want that to happen on the personal side.

Apple also saying here that they are very concerned about privacy issues.

And so they want the EC to address that.

But, Rachelle, the fines here for violations of this law, they're steep.

They're up to 10% of total annual worldwide revenues for these companies.

Also for repeat offenders, they can go as high as 20%.

Not to mention there's also the option for the EC to look for divestiture for offenses that are multiple offenses of these laws.

RACHELLE AKUFFO: Certainly, it would be a huge deterrent there.

And it really almost a slap in the face for a lot of these companies who really prides themselves on having these ecosystems.

We appreciate you getting us up to date on that.

We'll see how that plays out.

Big thank you there to our very own Alexis Keenan.