EU General Court: Microsoft Edge Not DMA Gatekeeper, Rejects Opera Appeal

• The EU General Court affirmed the European Commission's decision not to designate Microsoft Edge as a Digital Markets Act gatekeeper.
• This ruling emphasized Edge's low actual usage in the EU, recorded at 5.8% of web page views in December 2022, despite its pre-installation on Windows.
• Opera Norway's challenge, which argued Edge's Windows integration made it an essential gateway, was rejected by the court.
• Experts highlight that the decision clarifies the Commission's methodology, focusing on market impact and establishing a "law of evidence" for DMA enforcement.
• The Digital Markets Act, effective since May 2023, aims to prevent dominant tech platforms from stifling competition, with 24 core platform services currently designated as gatekeepers, across seven companies including Booking.com.

This landmark decision clarifies the European Commission's methodology for designating 'gatekeepers' under the Digital Markets Act, emphasizing actual market usage and impact over mere pre-installation advantages.

The European Union's General Court recently affirmed a pivotal decision by the European Commission, rejecting an appeal from Opera Norway that sought to classify Microsoft Edge as a gatekeeper under the Digital Markets Act (DMA). This ruling means Microsoft Edge will not be subjected to the DMA's most stringent regulations, despite its inherent advantages from being pre-installed on Windows operating systems. The court's judgment, delivered on a Wednesday, underscored that a browser's default position on a widely used platform does not automatically translate into sufficient market power to warrant gatekeeper status.

Central to the court's reasoning was the actual market penetration and usage of Microsoft Edge within the EU. While the browser met the numerical user thresholds outlined in the DMA, its real-world engagement lagged significantly behind its primary competitors. Data from December 2022 indicated that Edge accounted for only 5.8% of European web page views across various devices. This figure stands in stark contrast to Google Chrome, which commanded 59% of the market, and Apple Safari, holding 22%. The court explicitly stated that the Commission is justified in considering such a low scale of usage as evidence that a core platform service does not function as an important gateway.

Opera Norway, the Oslo-based browser developer, had contended that Microsoft Edge served as an indispensable conduit between businesses and users, thereby positioning Microsoft as a gatekeeper. Their arguments highlighted several strategic advantages Edge enjoys through its integration with Windows, including its pre-installation, prominent placement on the taskbar, automatic redirection of certain links, and preferred access to Bing Chat. These features, Opera argued, created an unfair competitive landscape.

However, the court found that these advantages did not translate into the necessary market dominance. Evidence showed that even on Windows computers, Google Chrome continued to attract more traffic than Edge, with Microsoft's browser handling only 20% to 30% of browsing activity. The court also considered Edge's reliance on Blink, the rendering engine controlled by Google, which dictates how web pages load and appear. Furthermore, Opera failed to demonstrate that specific Microsoft-controlled Edge features significantly impeded businesses attempting to connect with their user base. The broader ecosystem of Microsoft was deemed relevant only if it demonstrably enhanced Edge's practical market power.

The Digital Markets Act, which became applicable in May 2023, was designed to curb the power of the largest technology platforms, preventing them from leveraging their established positions to stifle competition within the European Union. The current roster of designated gatekeepers under the DMA includes 24 core platform services, with seven companies designated as gatekeepers: Alphabet, Amazon, Apple, Booking.com, ByteDance, Meta, and Microsoft. Designated services include Google Chrome, Apple Safari, Microsoft Windows, and LinkedIn. Notably, several other Microsoft and Apple services, including Bing, Microsoft Advertising, and Apple's iMessage, also surpassed the initial numerical thresholds but were ultimately exempted following more detailed reviews, similar to Edge.

This ruling offers crucial insights into the evolving "law of evidence" under the DMA, as noted by Friso Bostoen, an assistant professor of competition law and digital regulation at Tilburg University. He suggests that the judgment empowers the Commission to utilize evidence commonly found in competition cases, avoiding a rigid, mechanical examination of every factor stipulated in the law. From a policy perspective, Bostoen added, designating a third or fourth-tier browser player as a gatekeeper would not be logical. Separately, Alba Ribera Martínez, an assistant professor of law and technology at VU Amsterdam, observed that investigators are likely to look beyond a company's self-serving arguments when considering exemptions. The Commission, in this instance, conducted its own thorough inquiry, consulting competitors, website owners, and software developers, and scrutinizing browser features and artificial intelligence capabilities. The court also affirmed Opera's right to bring the case, despite the Commission's objections regarding the timeliness and completeness of Opera's initial responses, acknowledging the limited formal avenues for outside companies to participate in such investigations.

This landmark decision clarifies the European Commission's methodology for designating 'gatekeepers' under the Digital Markets Act, emphasizing actual market usage and impact over mere pre-installation advantages. For legal professionals advising digital platforms, this precedent is vital when assessing DMA compliance or contemplating challenges to designation decisions, particularly as it illuminates the evidentiary standards emerging for the Act. The ruling reinforces that while numerical thresholds are a starting point, the Commission retains discretion to evaluate the practical significance of a service as an "important gateway" based on comprehensive market data. Opera, for its part, has declared its intention to persist in its advocacy for greater browser choice and user control over devices.

This ruling clarifies the European Commission's methodology for designating 'gatekeepers' under the Digital Markets Act, emphasizing actual market usage and impact over pre-installation advantages. Lawyers advising digital platforms should consider this precedent when assessing DMA compliance or challenging designation decisions, particularly regarding the 'law of evidence' emerging for the Act.

Source: Original reporting via Courthouse News Service