On 5.9.2023, the Commission adopted a decision pursuant to Article 3 of Regulation (EU) 2022/1925 of the European Parliament and of the Council  (1) . In accordance with the provisions of Article 44 of Regulation (EU) 2022/1925, the Commission herewith publishes the names of the parties and the main content of the decision, having regard to the legitimate interest of undertakings in the protection of their business secrets.

1.   INTRODUCTION

(1)

The purpose of the Designation Decision (‘the Decision’) is to designate Meta as a gatekeeper pursuant to Article 3 of Regulation (EU) 2022/1925 (‘DMA’) and to list the relevant core platform services that are provided by Meta and which individually are an important gateway for business users to reach end users as referred to in Article 3(1)(b) DMA.

(2)

Meta furthermore submitted a rebuttal pursuant to Article 3(5) DMA with its notification in relation to (i) its number-independent interpersonal communication service (‘NIICS’) Messenger, and (ii) its online intermediation services Marketplace. In the decision, the Commission rejects the rebuttal arguments in both cases because they are not sufficiently substantiated to manifestly call into question the presumptions in Article 3(2) DMA for the reasons summarised in the Commission’s assessment below.

2.   PROCEDURE

(3)

On 3 July 2023, Meta notified the Commission, pursuant to Article 3(3), first subparagraph, of the DMA, that it meets the thresholds laid down in Article 3(2) of that Regulation in relation to the following core platform services (‘CPSs’): (i) its single online social networking service supported by online advertising comprising, in Meta’s view, Facebook, Instagram, Meta Ads, Messenger, Marketplace, Facebook Dating and Facebook Gaming Play; and (ii) its NIICS, WhatsApp.

(4)

On 6 July 2023, the Commission sent Meta a request for information pursuant to Article 21(3) DMA. The information requested was necessary for the Commission to assess whether Marketplace and Messenger are distinct CPSs individually meeting the thresholds in Article 3(2) DMA. Meta submitted its response on 11 July 2023.

(5)

On 10 July 2023, the Commission sent Meta a request for information, dated 7 July, pursuant to Article 21(2) DMA, related to Messenger. Meta submitted its response on 12 July 2023 and 16 July 2023.

(6)

On 26 July 2023, the Commission sent Meta a letter concerning Meta’s notification (the ‘Letter’). In this Letter, the Commission took the preliminary view that it shall designate, pursuant to Article 3(4) DMA, Meta as a gatekeeper in relation to: (i) its online social networking service Facebook; (ii) its online social networking service Instagram; (iii) its online advertising service Meta Ads; (iv) its NIICS WhatsApp; (v) its NIICS Messenger and (vi) its online intermediation services Marketplace.

(7)

On 3 August 2023, Meta sent a reply to the Commission’s Letter challenging the preliminary views of the Commission and maintaining its position and on 13 August 2023 an additional letter.

3.   LEGAL FRAMEWORK

(8)

The DMA establishes a set of narrowly defined objective criteria for qualifying a large online platform as a gatekeeper. Designation is to be made in relation to one or more CPSs provided by the undertaking that are an important gateway for business users to reach end users within the meaning of Article 3(1)(b) DMA. In order to determine whether a service provided by an undertaking is a CPS that meets the requirement set out in Article 3(1)(b) DMA, it is necessary, as a preliminary step, to qualify and delineate the respective service. A relevant criterion for qualifying and delineating CPSs is the purpose for which the service is used by either end users or business users or both.

(9)

According to Article 3(1) DMA, the Commission is to designate an undertaking as a gatekeeper if it fulfils three cumulative requirements, namely: (a) it has a significant impact on the internal market; (b) it provides a CPS which is an important gateway for business users to reach end users; and (c) it enjoys an entrenched and durable position, in its operations, or it is foreseeable that it will enjoy such a position in the near future. Article 3(2) of the DMA lays down a presumption that those requirements are satisfied where certain quantitative thresholds are met, namely the company’s turnover or market capitalisation as well as the numbers of end users and business users of a particular CPS in each of the last three financial years.

(10)

Pursuant to Article 3(5), first subparagraph DMA, an undertaking that meets all the thresholds laid down in Article 3(2) DMA may present, with its notification, arguments to demonstrate that, although it meets all those thresholds, it exceptionally does not satisfy the requirements laid down in Article 3(1) DMA due to the circumstances in which the relevant CPS operates. Article 3(5), second subparagraph DMA provides that if the arguments submitted are not sufficiently substantiated because they do not manifestly call into question the presumptions set out in Article 3(2) DMA, the Commission may reject the arguments. By contrast, should the Commission considers that the submitted evidence is sufficient to demonstrate that the requirements laid down in Article 3(1) DMA are not fulfilled, it may accept the rebuttal with or without opening a market investigation pursuant to Article 17(3) DMA.

4.   THE COMMISSION’S ASSESSMENT

(11)

Following the notification by Meta, the Commission established that the following services notified constitute CPSs pursuant to Article 2 DMA and are individually an important gateway for business users to reach end users as referred to in Article 3(1)(b) DMA: a. Meta’s online social networking service Facebook; b. Meta’s online social networking service Instagram; c. Meta’s online advertising service Meta Ads; d. Meta’s NIICS WhatsApp; e. Meta’s NIICS service Messenger; and f. Meta’s online intermediation services Marketplace.

(12)

With respect to Meta’s online social networking services Facebook and Instagram, in disagreement with Meta’s view, the Commission considers that Facebook constitutes an online social networking CPS which is distinct from the online social networking service Instagram because these services (i) are offered as entirely distinct services; (ii) are not offered to users in an integrated way, and in any event, (iii) are used for different purposes by their end users and their business users, as these users tend to share and engage with different types of content, functionalities and user bases on the two platforms.

(13)

Furthermore, the Commission considers that, in disagreement with Meta’s view, Facebook Dating and Facebook Gaming Play, which are integrated in the Facebook platform, constitute distinct services from the online social networking service Facebook, irrespective of whether these services constitute CPSs. The Commission considers that these services each serve a purpose that is distinct from that of the online social networking service Facebook and that they are offered by Meta as clearly identifiable and distinct services from that of the online social networking service Facebook.

(14)

With respect to Meta’s online advertising service Meta Ads, the Commission disagrees with Meta’s notification. According to Meta, the ad-supported online social networking service comprises the features and functionalities that make up the Facebook and Instagram surfaces that are supported by revenue generated through Meta Ads.

(15)

The Commission considers that Meta’s online advertising services and online social networking services offer very different features and functionalities and serve very different purposes from the perspective of both the end users and business users. Furthermore, the Annex to the DMA clarifies that CPSs offered in an integrated way should be considered distinct if they do not belong to the same CPS category. Therefore, the Commission concludes that Meta Ads constitutes a distinct online advertising CPS within the meaning of Article 2(2)(j) DMA and that Meta Ads meets the thresholds laid down in Article 3(2) DMA.

(16)

The Commission agrees with the delineation of Meta’s NIICS WhatsApp. Based on the information provided by Meta, the Commission finds that the business user threshold is also met in relation to WhatsApp, when taking into account the various ways that Meta provides to businesses to communicate via WhatsApp.

(17)

With respect to Meta’s NIICS Messenger, the Commission considers, in disagreement with Meta’s submission, that Messenger is a distinct and self-standing service from its online social networking service Facebook. The Commission considers that Messenger fulfils the definition of NIICS at set out in Article 2 (7) of the Electronic Communication Code to which the definition of a NIICS laid down in Article 2 (9) DMA refers to.

(18)

Furthermore, the Decision considers that the legal test proposed by Meta to assess whether Messenger is a standalone CPS or the chat function of its online social networking service Facebook is legally flawed.

(19)

Moreover, the Commission considers that Messenger meets the thresholds contained in Article 3(2) DMA. More specifically, concerning business users, based on the information provided by Meta and despite the shortcomings in its methodology, the Commission notes that the figure provided by Meta for September 2020 alone puts business users above the 10 000 threshold. Based on extrapolations of that figure for 2020, 2021 and 2022, the Commission finds therefore that the threshold is met.

(20)

Finally, the Commission finds that the arguments submitted by Meta in relation to Messenger are not sufficiently substantiated to manifestly call into question the presumptions in Article 3(2) DMA. In particular, the Commission considers that the number of yearly active business users of Messenger significantly exceeds the threshold of 10 000 business users, and Meta failed to produce convincing evidence that even with such a margin the CPS in question is not a gateway for business users to reach end users. Moreover, the Commission disagrees with Meta that Messenger is not an important gateway as the data provided by Meta concerning both business users and end users clearly establish the important scale of Messenger with respect to both end users and business users, and as an important gateway between both.

(21)

With respect to Meta’s online intermediation service Marketplace, the Commission considers that, in disagreement with Meta’s submissions, Marketplace, despite being integrated in Facebook, is a distinct service from the online social networking service Facebook. Indeed, Facebook enables its end users to connect and communicate with each other, share content and discover other users and content, while Marketplace allows users, including business users, to list goods or services to other users, with a view to facilitating the initiation of direct transactions between those users.

(22)

Furthermore, in disagreement with Meta’s views, the Commission considers that Marketplace fulfils the definition of online intermediation services referred to in Article 2(5) DMA. Marketplace is not exclusively a consumer-to-consumer (C2C) platform, but also has business users, and such a conclusion is not affected by the fact that Marketplace also allows for C2C transactions. During the period 2020 to 2022, business users could, legitimately, list their product or services on Marketplace via their Facebook business Page. Moreover, over that same period 2020-2022, business users could also act in a commercial or professional capacity by listing products and services to end users on Marketplace through their Facebook personal profile. Even though, from 30 January 2023 onwards, business users are no longer allowed to list items for sale through their Facebook business Page, business users can still list items through their personal profile as also advertised by Meta itself.

(23)

Moreover, in disagreement with Meta’s views, to the Commission considers that Marketplace business users can be identified through the use of the best approximation available, in light of the data provided by Meta, as set out in Section A(1) of the Annex to the DMA. On this basis, it is appropriate to consider as business users of Marketplace all users, established or located in the Union, which created 28 or more listings in at least one month of the financial year, with 80 % or more listings being made in the same category. Upon request of the Commission, Meta indicated that based on these criteria the business user threshold was met by a large margin of more than tenfold in the financial years 2020, 2021 and 2022.

(24)

Finally, it is considered that the arguments submitted by Meta in relation to Marketplace are not sufficiently substantiated to manifestly call into question the presumptions in Article 3(2) DMA. First, in disagreement with Meta’s view and as explained in detail in the preceding paragraphs, Marketplace has business users in the sense of Article 3(2)(b) DMA and is a gateway between these business users and end users. Second, with possibly more than 100 000 business users and more than 100 million end users, Marketplace is also an important gateway. Third, Marketplace is also an individually important gateway; Meta’s claim to the contrary because of Marketplace’s reliance on Facebook is based on an incorrect application of the delineation rules in Annex, point D.2.c. DMA. Forth, in disagreement with Meta’s view, the correct standard for the assessment of the rebuttal pursuant to Article 3(5) DMA is ‘manifestly call[ing] into question the presumptions’ set out in Article 3(2) DMA.

(25)

The findings in the Decision are based on the information available to the Commission at the time of the Decision. Should there be any substantial change in any of the facts on which this Decision is based, or if this Decision is based on incomplete, incorrect or misleading information, the Commission may reconsider or amend the Decision pursuant to Article 4(1) DMA.

5.   CONCLUSION

(26)

For the reasons set out above, the Decision designates Meta as a gatekeeper in relation to (i) Meta’s online social networking service Facebook; (ii) Meta’s online social networking service Instagram; (iii) Meta’s online advertising service Meta Ads; (iv) Meta’s NIICS WhatsApp; (v) Meta’s NIICS Messenger and (vi) Meta’s online intermediation services Marketplace.

(27)

The Decision rejects the rebuttal arguments raised by Meta in relation to (i) the NIICS Messenger and (ii) the online intermediation services Marketplace.

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(1)  Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act) (OJ L 265, 12.10.2022, p. 1).