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Meta is the first company to publicly challenge the EU’s decision to designate some popular online products as “core services.” This is part of a larger fight by Big Tech against Brussels’ new digital rules intended to improve competition.
As part of its appeal before the Luxembourg courts against the designation of Facebook Messenger and Marketplace, Meta will argue that Messenger is a chat functionality of Facebook and is therefore not a separate app and therefore not a separate service .
People familiar with the appeal also said the company will argue that Marketplace is a consumer product and not a “gateway” for companies to target consumers – a requirement that must be captured in the Digital Markets Act.
Meta said: “This appeal seeks to resolve specific legal issues relating to the designations of Messenger and Marketplace under the DMA. It does not alter or detract from our firm commitment to compliance with the DMA and we will continue to work constructively with the European Commission to prepare for compliance.”
The Commission, the EU’s executive arm, declined to comment.
The new obligations under the DMA for the largest, mostly American, technology companies go to the heart of how companies like Apple and Meta generate billions of dollars in revenue in Europe each year. The law obliges companies to make their services interoperable with those of competitors for the first time and to open their closed ecosystems to competing services.
Apple, Amazon and TikTok, which are also covered by the new law, are reportedly considering filing an appeal before the November 16 deadline.
Separately, Microsoft and Google, whose services are also classified as “core services” and face new obligations under the DMA, will not appeal their designations, people with direct knowledge of their thinking say.
Metas will be the first lawsuit against the Digital Markets Act, but similar appeals against other laws have rarely been successful.
The DMA, due to come into force in the first quarter of 2024, aims to break the strong hold of a handful of companies in digital markets in the EU and open markets to competition. Critics of the rules argue that more regulation would lead to less innovation and that this would ultimately undermine the ability of European digital companies to succeed.
Companies have until March 6th to comply with the new rules. However, their appeals do not allow them to evade compliance with the law. A court in Luxembourg is expected to rule on the appeals within a few months, rather than years, as has traditionally been the case in antitrust investigations.