X Avoids EU ‘Gatekeeper’ Designation and Requirements

Yeah, I’m not sure that this is the win that Elon Musk and Co. seem to think that it is.

Today, Reuters has reported that the European Commission has ruled that X does not meet its designation as a “gatekeeper” platform, which will mean that X won’t be beholden to the EU’s more stringent operating requirements for big tech players.

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 to access any data that they generate in their use of the gatekeeper’s platform, and provide ad performance info for independent verification.

The aim, essentially, is to ensure fair competition in the market, by ensuring that these big platforms don’t squeeze out smaller players because of their dominant position.

And after investigation, the EU has reportedly decided that X will not have to meet these requirements.

Which is no doubt a relief to Elon and Co. because of these additional obligations. But still, that also means that EU officials have decided that X simply doesn’t hold the market power or influence to require additional safeguards.

In order to qualify as a gatekeeper platform, EU officials need to determine that the company:

• Has a significant impact on the internal market
• Provides an important gateway for business users to reach end users
• Holds an entrenched and durable market position

X, according to EU investigators, doesn’t meet these thresholds. Which means, really, that EU officials simply don’t see X as being a key player in the European market.

Which makes some sense. X 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, and influence. And when compared to Meta’s 250 million EU monthly actives, and TikTok’s 142 million MAU, combined with their respective ad market share and cultural dominance, you can see how X is not currently considered to be on the same scale as these other platforms.

But still, Elon and his supporters are angling this as “a win for innovation and free speech”, as Elon continues to push back against “overreaching bureaucracy” and EU red tape that could strangle the app’s growth.

So he’s fighting back against EU regulation by ensuring that his platform remains less relevant and influential?

I don’t know, it seems odd how political leanings overpower logic and reason in this sense, but the bottom line is that X is not being held to the EU’s gatekeeper platform standards because it’s simply not impactful enough to sway EU markets to the same degree as these other businesses.

That doesn’t seem like a great endorsement of the app, and/or Musk’s management. But I guess the truth is what you make it.