X excluded from EU's tech regulations under Digital Markets Act

According to reports, The European Commission has ruled that X, formerly known as Twitter, does not meet the criteria to be designated as a ‘gatekeeper’ platform under the EU’s Digital Markets Act (DMA), 

In order to qualify as a gatekeeper platform, EU officials need to determine that the company,

• Has a significant impact on the internal market
• Provides an important gateway for business users to reach end users
• Holds an entrenched and durable market position

As a result, the platform will not be subject to the stringent obligations imposed on other major tech firms under the DMA, including requirements to allow third-party system interoperability and to provide business users access to data and ad performance metrics.

The decision follows an investigation launched by the European Commission in May after the platform argued that while it met the user number threshold, it did not qualify as an essential gateway between businesses and consumers.

Platforms classified as gatekeepers under the DMA are subject to strict rules to prevent anti-competitive behaviour, such as the need to let messaging apps interoperate with rivals and prohibit the favouring of their own services. Failure to comply could result in fines of up to 10% of a company’s global turnover.

Companies like Alphabet, Amazon, Apple, Meta, Microsoft, TikTok owner ByteDance, and Booking.com have been designated as gatekeepers, making the platform's exclusion notable.

The platform's current user base in Europe stands at around 105 million monthly active users, a decline of approximately 12 million since August 2023, raising concerns about its declining market relevance.

The ruling indicates that the European Commission does not view the platform as having significant market power or a durable, entrenched position in the European market compared to larger platforms like Meta and TikTok, which hold larger user bases and greater ad market influence.

Elon Musk and his supporters have positioned the ruling as a victory for innovation and free speech, citing it as a pushback against regulatory overreach and bureaucratic red tape in the EU.

🚨🇪🇺X WINS BIG IN EUROPE: NO GATEKEEPER LABEL UNDER EU TECH RULES!

X just scored a major victory in the European Union!

The platform has dodged the restrictive "gatekeeper" designation under the EU’s Digital Markets Act (DMA), a title that would have brought heavy regulations… pic.twitter.com/v57QlTGDev

— Mario Nawfal (@MarioNawfal) October 10, 2024

The decision highlights X’s diminishing relevance in the European digital market, especially in comparison to its rivals, further compounded by its struggles in the advertising space. The European Commission is expected to formally announce its decision next week.