Samsung may face tighter scrutiny under new EU rules

In case of infringement, tech companies can be fined up to 10% of annual turnover

European Commissioner for Internal Market Thierry Breton (European Commission)

Samsung Electronics may be subject to the European Union’s new platform service regulations targeting big tech companies, as the Korean tech giant notified the European Commission it meets the EU’s criteria as a “gatekeeper.”

On Tuesday, the EU revealed the names of seven companies that have reported they meet the criteria set by the Digital Markets Act, which came into force in November last year. The seven companies are Google parent company Alphabet, Amazon, Apple, TikTok developer ByteDance, Facebook parent company Meta, Microsoft and Samsung.

With the goal to protect consumer rights and for an open digital market, the European Commission introduced the law, presenting a number of criteria to designate the tech giants as gatekeepers.

According to the act, companies with at least 45 million monthly active users, 10,000 yearly active business users in the EU and a market capitalization of 75 billion euros ($82 billion) are considered as gatekeepers providing core platform services such as for social media.

Under the act, such gatekeepers are required to make their messaging apps interoperable with others and allow users to decide which apps to preinstall on their devices. They would also not be able to “lock in” users to their ecosystem, and would be banned from treating their own products and services more favorably. Tracking users for ads without their consent is also banned by the regulation.

Samsung’s inclusion came as unexpected, since the tech giant does not operate the core platform services the EU initially defined -- online intermediation services, online search engines, operating systems, online social networking, video sharing platform services, number-independent interpersonal communication services, cloud computing services, virtual assistants and online advertising services, including advertising intermediation services.

But Samsung appears to qualify as the EU later added web browser services to the core platform services.

The European Commission said it will verify the status of the seven companies and finalize the decision to designate the gatekeepers for specific platform services by Sept. 6, within 45 working days of submission. The gatekeepers then will have six months to comply with the Digital Markets Act rules.

If the companies do not comply, they could be fined of up to 10 percent of their total worldwide annual turnover, and the percentage could rise to 20 percent in the case of repeated infringements.

“With the Digital Markets Act, together with the Digital Services Act and the Data Act -- and soon with the AI Act, Europe is completely reorganizing its digital space to both better protect EU citizens and enhance innovation for EU startups and companies,” said Thierry Breton, European Commissioner for Internal Market.

While ByteDance also made an unexpected notification to the European Commission that it would meet the criteria, it argued as to whether it should be included on the list.

Apple earlier expressed strong concerns over the act, saying it could create security problems as it requires the companies designated as gatekeepers to allow users to install third-party app stores on their devices.

More companies are expected to report on their potential gatekeeper status. Booking.com is reportedly expected to notify the agency at the end of the year.

By Jo He-rim(herim@heraldcorp.com)