EU Commission Confirms That X Doesn’t Qualify as Key Business Platform

This is sort of a win for X, but sort of not.

Today, the European Commission has confirmed that the platform formerly known as Twitter does not currently qualify as a “Gatekeeper” platform under the EU Digital Markets Act (DMA), which means that X won’t have to adhere to EU rules around access and collaboration, as part of anti-monopoly regulations.

Under the EU Digital Markets Act (DMA), platforms identified as gatekeepers must enable third party systems to inter-operate with their services (e.g. Meta needs to let other messaging apps send messages to WhatsApp), while they also need to let business users access the data that they generate in their use of the platform, and provide ad performance info for independent verification.

The aim, essentially, is to ensure fair competition in the market, by making it harder for the tech giants to squeeze smaller players out due to their dominant position.

And after investigation, the EU has decided that X won’t be held to these requirements.

As per the EU Commission:

“Today, the Commission found that the online social networking service of X should not be designated as a core platform service under the Digital Markets Act (DMA). The decision comes after an in-depth market investigation launched on 13 May 2024 following the notification by X of its status of potential gatekeeper. Together with the notification, X also submitted rebuttal arguments, explaining why its online social networking service should not, in its view, qualify as an important gateway between businesses and consumers, even if X is deemed to meet the quantitative thresholds set out in the DMA.”

So X has been trying to avoid gatekeeper classification, as it will impose more reporting and transparency requirements, as well as the noted inter-connectivity clauses. That’s a lot more regulatory work for X, so it would prefer not to fall into that category, if possible.

But then again, as the Commission notes:

“The investigation revealed that X is not an important gateway for business users to reach end users.”

That seems not great, that X, despite its much touted influence, is not considered significant enough in the EU market to qualify as a key connector.

Though it also makes sense.

X currently has 105 million monthly active users in Europe, which has declined by around 12 million users since August 2023. The steady decline in X usage, combined with the challenges in its ad business, do suggest that X is losing relevance in this respect.

For comparison, Meta has around 250 million EU monthly actives using both Facebook and IG, while TikTok has 142 million MAU. Both have met the qualifications as gatekeepers in the region, though that’s also reflective of the strong performance of their ad businesses in the market.

And X is simply not on the same level, though the Commission does note that it will continue to monitor the situation, and can reassess at any time.

Supporters of X owner Elon Musk, meanwhile, have praised this as “a win for innovation and free speech”. Which it’s not, it has nothing to do with X’s broader mission to allow more types of content on the platform. But conceptually, without these extra requirements, maybe, X will be more free to chase this ambition.

Though probably not. Really, the ruling only shows that X is not a major player in the EU market, and is losing relevance overall. So it’s a win, in terms of reduced requirements, but a blow, in reflecting that X is behind the competition.

Maybe Elon’s “everything app” vision will eventually change this. But right now, X is not considered in the upper tier of business connecting social apps.