OTAs miss out on European digital gatekeeper list

Europe: Online travel agencies [OTAs] have failed to meet the thresholds to be considered digital ‘gatekeepers’ as part of the European Digital Markets Act [DMA], for the time being at least.

“Large, systemic digital platforms” which operate on the EU digital market had until 3 July to notify the European Commission that they met the thresholds to qualify as ‘gatekeepers’ under the DMA. The companies which have been declared as meeting the thresholds by the Commission include Alphabet [the parent company of Google], Amazon, Apple, ByteDance [the parent company of TikTok], Meta [the parent company of Facebook], Microsoft and Samsung.

Digital ‘gatekeepers’ are described as large companies that are an access point for consumers and are able to use their market position and power in a way that impacts other markets.

To meet the necessary thresholds to be considered a ‘gatekeeper’, the European Commission has outlined three main cumulative criteria:

  • Companies must be large enough to impact the internal market, generating an annual turnover of €7.5 billion or more in the past three financial years. In addition, they must provide a core platform service in at least three EU member states.
  • Companies must have control of a consumer-facing gateway for business users, as in having more than 45 million monthly active users established or located in the European Union, as well as over 10,000 annual business users established in the EU over the last financial year.
  • If a company meets the aforementioned two criteria, it is said to have an “entrenched and durable position”.

For the next stage, the European Commission will check over the submissions and designate the gatekeepers for specific platform services by 6 September – or within 45 working days from their submission.

The gatekeepers will then have six months to comply with the DMA rules, including:

  • Gatekeepers will no longer be able to lock in users in their ecosystem.
  • They will no longer be able to decide which apps you need to have pre-installed on your devices; which app store you have to use.
  • They will not be able to “self-preference”: exploiting the advantage of being the gatekeeper by treating their own products and services more favourably.
  • Their messaging apps will have to interoperate with others.

A full list of the “dos” and “don’ts” that all gatekeepers must comply with in their daily operations are explained here.

According to Thierry Breton, European Commissioner for Internal Market of the European Union, it means that:

  • “Consumers will have more services to choose from, more opportunities to switch providers, and will benefit from better prices and higher quality services.”
  • “Innovative companies will no longer be prevented from reaching new customers.”
  • “Because with great power comes great responsibility – and impeccable behaviour.”

Ahead of the publication of the European digital gatekeeper list, Booking.com, one of the OTAs which did not meet the thresholds under the DMA, issued a pre-emptive statement: “We are engaged in constructive discussions with the European Commission on the applicability of the DMA and look forward to continuing this dialogue. As a result of the impact of Covid-19 on our business, we do not meet the DMA’s quantitative thresholds for the time period associated with the July 2023 submission deadline. We are aligned on this with the European Commission.

“However, we expect that these thresholds will likely be met at the end of this year, in which case we would expect to notify the European Commission of that fact within the required deadlines,” the company added.

While no OTAs made the list on this occasion, Airbnb and Booking.com have previously been touted as potential digital gatekeepers. Three years ago, Booking Holdings CEO Glenn Fogel said his company should not be treated as a digital gatekeeper on the grounds that the accommodation market in Europe is open and competitive, while Airbnb has said that its activities should meet the rules set out by the European Commission under the DMA.

Looking ahead, Breton said that with the Digital Markets Act [DMA], the Digital Services Act, the Data Act and the soon-to-be-introduced AI Act, Europe is “completely reorganising its digital space to better protect EU citizens and enhance innovation for EU startups and companies”.

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