Booking.com hits a regulatory wall: New "gatekeeper" status under EU's Digital Market Act
The European Commission recognized on Monday that the Booking.com platform, which is used for renting accommodation among other services, has been classified as a "gatekeeper." This classification means it must adhere to stricter EU regulations under the Digital Markets Act (DMA).
“This is good news for vacationers because they will have a wider choice, and hotels will have more business opportunities,” commented Margrethe Vestager, the Vice-President of the EC responsible for competition.
Booking.com classified as a "gatekeeper"
As a result, Booking.com has six months to comply with the DMA regulations. The purpose of these rules is to prevent large online platforms from abusing their dominant position, for instance, to the detriment of businesses utilizing their platform (for Booking, these would primarily be hotels).
The six-month grace period does not apply to all DMA rules. Certain regulations concerning Booking take effect immediately, such as the obligation to notify Brussels of any intended mergers. This is particularly significant since in September 2023, the EC disapproved the merger of Booking.com with the technology firm eTraveli.
For breaching DMA regulations, the EC can levy a fine ranging between 10 to 20 percent of the company's global turnover.
Understanding the "gatekeeper" designation
The DMA defines a "gatekeeper" as a company with more than 7.5 billion euros (approximately 11 billion CAD) in annual revenue within the Union, and with over 45 million monthly users. Besides these quantitative thresholds, the Commission also considers qualitative factors that demonstrate the company's significance to European business.
Booking.com has become the seventh gatekeeper identified by the Commission. The first six were named in September 2023. Consequently, the executives from Alphabet (Google's parent company), Amazon, Apple, ByteDance, Meta, and Microsoft were reported in March on their compliance with the new law. By the end of April, the EC had also added Apple's iPadOS, the operating system for tablets, to this list.
Additionally, on Monday, the EC declared that the services dealing with the sale and trading of advertising, X Ads, and TikTok Ads, do not qualify as "gatekeepers." Although both services exceed the quantitative thresholds, the EC determined they do not hold enough significance.
