Elon Musk's X Seeks to Bypass EU Tech Rules Requirements

Photo : Reuters

Elon Musk’s social media platform, X (formerly known as Twitter), will not be designated as a gatekeeper under the European Union's stringent tech regulations, known as the Digital Markets Act (DMA). According to sources familiar with the matter, this decision will spare the platform from a series of obligations that are imposed on tech giants, including Alphabet, Amazon, Apple, Meta, Microsoft, TikTok owner ByteDance, and Booking.com.

The European Commission launched an investigation into X in May to determine whether the platform meets the criteria to be classified as a gatekeeper. While X acknowledged that it meets the user base criterion, the company argued that it does not serve as a crucial gateway between businesses and consumers, a key aspect of the DMA’s requirements.

The platform’s defense led the Commission to investigate the matter further, prompting a review of X’s role in the digital ecosystem. The decision, expected to be announced next week, is likely to confirm that X does not fall under the scope of the Digital Markets Act, according to people with direct knowledge of the situation. The EU competition authority has not issued any official comments on the matter.

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The Digital Markets Act is part of the EU’s broader efforts to regulate big tech companies and curb monopolistic practices. Gatekeepers designated under the DMA are required to meet specific obligations, such as ensuring their messaging apps can interact with competitors' services and allowing users to choose which apps to pre-install on their devices. They are also prohibited from favoring their own products over rivals' offerings. Failure to comply with the rules can result in fines of up to 10% of a company's global annual revenue.

Had X been designated a gatekeeper, it would have been required to follow the same set of rules imposed on larger tech firms. However, the Commission’s investigation appears to have found that X does not meet the threshold for this classification, sparing the platform from facing these regulatory burdens.

The Commission’s ruling is expected to be closely watched, given that X, under Elon Musk’s leadership, has undergone significant changes since its acquisition in 2022. The platform has reduced its workforce, modified content moderation policies, and introduced a paid verification system. These changes have raised concerns about the platform’s role in promoting business-to-consumer interactions and its influence over digital markets, which led to the initial probe by the Commission.

As of now, companies that have been designated as gatekeepers must comply with the DMA’s rules or risk hefty penalties, marking a new chapter in the EU's efforts to maintain fair competition in the tech sector

Oct. 11, 2024 10:54 a.m. 555

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