Booking.com named gatekeeper under EU Digital Markets Act, faces new rules
The European Commission announced on Monday that the Booking.com platform, widely used for accommodation rentals, has been designated as a "gatekeeper." This classification subjects it to the stringent regulations set forth by the Digital Markets Act (DMA).
7:41 PM EDT, May 13, 2024
"This is excellent news for vacationers, as they will benefit from a broader selection of accommodations, and it opens up more business opportunities for hotels," said Margrethe Vestager, the Vice-President of the EC in charge of competition.
Booking to comply with DMA regulations
As a result, Booking.com has six months to align its operations with the DMA's requirements. The DMA aims to curb the potential for large online platforms to misuse their dominant positions, potentially disadvantaging businesses that use their services, such as hotels listed on Booking.com.
The six-month period does not apply to all aspects of the DMA. Certain provisions are effective immediately, for instance, Booking must now inform Brussels about any major business consolidations. This follows the EC's refusal in September 2023 to approve a merger between Booking.com and technology firm eTraveli.
Failure to comply with the DMA could result in the EC imposing fines of 10 to 20 percent of the company's global turnover.
Definition of a "gatekeeper"
Under the DMA, a "gatekeeper" is defined as a company with an annual EU turnover exceeding 7.5 billion euros and more than 45 million monthly users. The Commission also considers qualitative factors that signify the company's importance to the European market.
Booking.com is the seventh entity to be recognized as a gatekeeper. The first six, identified in September 2023, include major corporations like Alphabet (Google's parent company), Amazon, Apple, ByteDance, Meta, and Microsoft, who reported in March on their compliance with the new law. By the end of April, the EC expanded this list to include iPadOS, Apple's tablet operating system.
Moreover, the EC clarified on Monday that advertising services X Ads and TikTok Ads do not meet the criteria to be considered gatekeepers. Despite surpassing quantitative thresholds, they were deemed not critically important.
