Meta to challenge EU tech crackdown on platforms
Meta Platforms' lawyers will go up against the European Commission on Tuesday to challenge having part of the company's lucrative social-networking business included in the bloc's crackdown on Big Tech market power.
At issue are Facebook's Messenger and Marketplace features, which Meta argues the European Union's digital regulators shouldn't have classified as so-called core platform services that must obey the Digital Markets Act, the bloc's new tech antitrust rule book. A hearing is scheduled for Tuesday morning in Luxembourg at the General Court of the European Union, the bloc's second-highest court.
Meta's lawyers contend that the Messenger app is an extension of the company's flagship social network–which the DMA already targets–and not a separate chat service. Under the law, the EU labels tech companies like Meta as 'gatekeepers" because they run platforms that serve as key gateways for companies to do business online in the bloc. Platforms are targeted by the DMA based on certain turnover and monthly user thresholds within the EU. The commission said in September 2023 that both Meta's Messenger chat service and Marketplace shopping platform are significant channels for businesses to reach customers, and that the company failed to prove otherwise when officials were looking at how to categorize them under the law.
Apple's iOS operating system and Safari browser and Alphabet's Google's ubiquitous search engine have also come under the scope of the law, which forces companies to change how they operate in Europe and make it easier for rivals to operate on their platforms. Companies that flout those rules could face fines of up to 10% of their annual sales, with penalties escalating to 20% for repeat offenses.
The European Commission, the EU's executive arm, originally classed six Meta products–Facebook, Instagram, Marketplace, Messenger, WhatsApp and Meta's advertising business–as core platforms under the DMA in September 2023.
Meta is one of three tech companies suing the commission over DMA enforcement. Apple and ByteDance-owned TikTok filed legal challenges of their own at the General Court after EU officials classed them as gatekeepers under the law.
Meta could also appeal a fine of 200 million euros ($228.8 million) levied by the commission this year for allegedly breaking the DMA's rules on data processing, by charging users for a subscription service to stop their data being used for targeted advertising.
Earlier this year, the commission opted to remove Meta's Marketplace from the original list of six products that come under the scope of the DMA. However, Meta is still appealing the regulator's original decision to class Marketplace as a core platform service as it said it shouldn't have been labeled as such in the first place.
The social-networking company has criticized the EU and its tech regulations in recent months. That criticism has been echoed by U.S. President Trump, who accused the commission of going after American tech groups and taxing them through antitrust fines.
'The commission is already in a very difficult place," Cristina Caffarra, an antitrust economist who has worked with Big Tech companies like Apple, said. Losing this challenge could make things more difficult for the commission enforcing its law going forward, but the changing geopolitical environment under Trump has already put that in jeopardy, Caffarra said.
'If the commission loses on this, it is a big loss," she said. 'That said, I don't think the DMA is going places anyway."
Write to Edith Hancock at edith.hancock@wsj.com
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