Microsoft's search engine Bing and its web browser Edge may be exempted from the EU's Digital Markets Act (DMA) that will force obligations on large digital platforms, dubbed gatekeepers, from March.

The exemption is due to the non-dominant nature of the search engine and the web browser in their segment, according to a Bloomberg report that cites sources. In essence, Bing and Edge are not big enough or popular enough to be termed gatekeepers and hence don't fall under the purview of the regulation.

Another exemption from the regulation is for Apple's iMessage service.

What is the Digital Markets Act?

The Digital Markets Act was adopted by the European Parliament and the Council in September 2022 after the initial proposal of the European Commission in December 2020.  

The Act was drafted to ensure that the digital markets across its member counters were "fairer" and "more contestable."

In order to do so, the Act lays down a set of norms that help identify gatekeepers of digital markets. In turn, gatekeepers, as per the Act, are large digital platform providing core platform services, such as online search engines, app stores, and messenger services among other applications.

Further, the Act lays down certain guidelines that gatekeepers will have to comply with in order to reach its objective of making the digital markets fairer and competitive.

The Act came into force in November, 2022 and became applicable in May, 2023.

The EU requires that companies, who have been identified as gatekeepers, notify the

Commission if they meet the quantitative thresholds and provide all relevant information within the next two months.

The Commission then had 45 working days to adopt a decision designating a specific gatekeeper. Post that the designated gatekeeper would have a maximum of six months to ensure compliance.

Microsoft and Apple fought back

In September 2023, Apple and Microsoft attempted to circumvent the DMA by arguing that neither iMessage nor Bing are sufficiently popular enough to be regulated by the legislation.

While Apple argued that iMessage does not meet the 45 million active monthly user threshold to be designated a gatekeeper, Microsoft made a case for its search engine citing that it only has 3% market share and hence doesn't meet the threshold set by the Commission.

Although Microsoft's Bing and Edge maybe exempted, the DMA will be applicable on its Windows operating system and its professional social networking company, LinkedIn. For Apple, the DMA will apply to the Apple App Store, its Safari browser, and its iOS operating system for iPhones.

Why the Act may be worrisome for gatekeepers?

The biggest challenge for all gatekeepers identified by the Commission seems to be that the Act doesn't allow an individual gatekeeper to favorably rank its own products and services against third-party products and services offered on its platform.

It lays down several guidelines that ensures that third-party services and business users have equal and fair access to data.

Further, the DMA also puts an end to practices, such as preventing users from uninstalling any pre-installed software or application if they wish to do so and preventing consumers from linking up to businesses outside their platforms.

In order to ensure that gatekeepers comply with the regulations, the Commission will carry out market investigations when required.

If and when a case of non-compliance is found, the Commission has readied a penalty structure that includes fines of up to 10% of the company's total worldwide annual turnover, or up to 20% in the event of repeated infringements.