Samsung Electronics Co. has steered clear of the European Union’s new set of regulations designed to rein in the dominance of Big Tech companies, such as Apple Inc. and Alphabet Inc., in Europe, a move expected to give the South Korean tech giant a chance to fill some void left by its rivals in the region.
On Wednesday, the European Commission (EC), which is the EU’s executive branch, announced that six multinational tech companies have been designated as the so-called gatekeepers that must abide by strict rules under the bloc’s Digital Markets Act (DMA).
They include Apple, Alphabet, Amazon.com Inc., Meta Platforms Inc., Microsoft Corp. and ByteDance Ltd.
Samsung Electronics, originally notified of its inclusion on the gatekeeper candidate list for its mobile web browser in July, has been omitted from the final list, according to the EC announcement.
“The Commission has concluded that, although Gmail, Outlook.com and Samsung Internet Browser meet the thresholds under the DMA to qualify as a gatekeeper, Alphabet, Microsoft and Samsung provided sufficiently justified arguments showing that these services do not qualify as gateways for the respective core platform services,” the EU wrote.
The exclusion of the Korean smartphone leader has been somewhat anticipated as it is viewed more as a manufacturer, not a platform operator.
As its archrival Apple has been designated as one of the gatekeepers, Samsung Electronics may enjoy windfall gains in the European smartphone market, where it commanded the largest share of 34% in the January-March period, market experts forecast.
Apple’s operating system iOS, App Store and web browser Safari must conform to the DMA rules, meaning that the iPhone maker’s App Store fees would decline with its restricted operation in Europe. It also has to allow third-party app stores.
DMA TO REIN IN BIG TECHS IN EUROPE
A total of 22 core platform services operated by the six gatekeepers, including Apple’s three services, are designated under the DMA.
They are four social networks TikTok, Facebook, Instagram and LinkedIn; six “intermediation” services Google Maps, Google Play, Google Shopping, Amazon Marketplace, iOS App Store and Meta Marketplace; three ad services Google, Amazon and Meta; two browsers Chrome and Safari; three operating systems Google Android, iOS and Windows PC OS; two messenger services WhatsApp and Facebook Messenger; one search engine Google; and one video streaming platform YouTube.
The EU has come up with the latest measure to contain the sprawling dominance of Big Tech in the region.
Companies with 45 million and more active local users, an annual turnover of 7.5 billion euros ($8 billion) in each of the last three financial years or equivalent market fair value of at least 75 billion euros in the last financial year are subject to the DMA rules.
If a gatekeeper violates the DMA rules, it will be fined as much as 10% of its global turnover and up to 20% for repeat offenses.
The EC can also force a gatekeeper to sell its business and block it from buying related services in cases of systematic DMA violations.
The gatekeepers are given a grace period of six months before the enforcement of the rules slated for March next year.
The new digital regulations have already met strong protests from the designated companies, and some of them such as ByteDance have warned of follow-up measures to fight back.
Write to Go-Woon Yi and Jeong-Soo Hwang at ccat@hankyung.com
Sookyung Seo edited this article.
