Elon Musk's X Isn't Important Enough To Feel The Full Force Of EU Regulation

The EU has said it won't classify Elon Musk’s X as “gatekeeper” – the bloc’s designation for the most significant digital platforms- because it doesn’t think the social network is that big a deal.

Under its Digital Markets Act (DMA) the EU can designate gatekeepers when they achieve a certain annual turnover, provide a core platform service in at least three member states and serve than 45 million monthly active end users.

To date, seven companies – Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft, and Booking.com – have earned the designation.

X won’t join their ranks, for now, due to somewhat embarrassing reasons.

"Following a thorough assessment of all arguments, including input by relevant stakeholders, and after consulting the Digital Markets Advisory Committee, the Commission concluded that X does indeed not qualify as a gatekeeper in relation to its online social networking service, given that the investigation revealed that X is not an important gateway for business users to reach end users," the org declared on Wednesday.

The EU began its investigations into X on May 12 this year, to determine if the social media platform was worthy of closer regulation. It acknowledged that X execs had argued that it was not a gatekeeper portal and have now concurred, declining to add it to the list. In May it also declined to impose restrictions on X Ads, commenting that "although X Ads meets the quantitative designation thresholds … this core platform service does not qualify as an important gateway."

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Ever since the DMA came into force in March 2024, tech platforms have tried to avoid being named as gatekeepers, because that status comes with obligations to do things like allowing potential competitors equal access to their platforms, and not giving their own services preferential treatment. Fines as high as 10 percent of global revenue can be charged for serious offenses.

This has already seen designated Gatekeepers make significant changes. Apple has had to open up iOS to third-party browsers, was forced to allow Epic Games to have its own payment engine for European users, and is currently under notice from the EU over possible DMA infringement regarding its policies for developers on its platform.

Google and Meta are also facing DMA probes. In the Chocolate Factory's case it is accused of steering users to its Play Store and "self-preferencing" on Search. Meta, meanwhile, is in the spotlight for its policy of charging EU users for an ad-free service.

So on one level X has dodged a bullet on this one. On the other hand, the EU's blunt language may peeve X’s CEO, who never seems to like being told he's not particularly important. ®