The European Commission has made a significant move by designating Booking as a gatekeeper for its online intermediation service, Booking.com, under the Digital Markets Act (DMA). This decision, however, does not extend to X Ads and TikTok Ads, which are still under scrutiny. The Commission has also opened a market investigation to assess the rebuttal submitted in relation to the online social networking service X. The EU’s executive branch, the European Commission, has clarified that Booking Holdings is an online gatekeeper, and that its Booking.com hotel reservation site meets the threshold to be classified as a “core platform service” under the Digital Markets Act of the 27-nation bloc.
“Today’s good news is: Holidaymakers will start benefiting from more choice and hotels will have more business opportunities. Following our decision Booking.com joins the list of core platform services required to adhere to DMA rules. Today we’ve also decided not to designate ByteDance and X over their online advertising services,” Margrethe Vestager, Executive Vice-President in charge of competition policy, said.
What the Digital Market Act is
The DMA is a regulatory framework that aims to prevent Big Tech platforms from dominating online markets, ensuring fair and contestable markets in the digital sector. It regulates gatekeepers, platforms that act as bottlenecks in the digital economy. The rules aim to make digital markets “fairer” by breaking up closed tech ecosystems that limit consumers to a single company’s products or services. This not only promotes competition but also provides consumers with more choices and businesses with more opportunities. Half a dozen companies have already been classified as online gatekeepers, including Apple, Google, and Meta, who are facing investigations into their compliance.
Booking has six months to comply
The Commission has designated Booking as a gatekeeper after its self-assessment, which established that the core platform service offered by Booking constitutes an important gateway between businesses and consumers. Booking now has six months to comply with the relevant obligations under the DMA, including submitting a detailed compliance report. The Commission will diligently monitor the effective implementation and compliance with these obligations. This rigorous oversight ensures that the DMA is not just a set of rules on paper, but a tool that is actively enforced to maintain fair and competitive digital markets. Failure to comply can result in fines up to 10% of the company’s worldwide turnover, while repeated infringements can increase the fine up to 20%. The Commission can adopt additional remedies for systematic infringements.
“Booking is an important player in the European tourism ecosystem and is now also a designated gatekeeper. We will work to make sure it will fully comply with the DMA obligations within 6 months. The DMA proves again to be a powerful but flexible tool to identify and regulate companies that are real gatekeepers,” specified Thierry Breton, Commissioner for Internal Market.
A market investigation on X
The Commission has launched a market investigation to evaluate the rebuttal submitted on 1st March 2024 in regards to the online social networking service X. This investigation is crucial as it will determine whether X, despite meeting the thresholds, qualifies as an essential gateway between businesses and consumers. The investigation is expected to be completed within five months. On another note, a rebuttal was submitted concerning the online advertising service X Ads. The Commission has concluded that even though X Ads meets the quantitative designation thresholds under the DMA, this core platform service does not qualify as an important gateway. Therefore, the Commission decided not to designate X Ads. Lastly, the Commission received a notification of ByteDance’s online advertising service TikTok Ads on 1st March 2024, including a rebuttal request. The Commission has concluded that, despite TikTok Ads meeting the quantitative designation thresholds under the DMA, this core platform service does not qualify as an important gateway. Consequently, the Commission decided not to designate TikTok Ads either.
