Following a thorough investigation, Elon Musk’s social media enterprise ‘X,’ previously known as Twitter, has navigated avoiding the stringent gatekeeper status under the European Union’s Digital Markets Act (DMA). This significant ruling was confirmed by the European Commission on Wednesday, as detailed in their announcement. The Commission found that ‘X’ does not fulfill the criteria as a gatekeeper in relation to online social networking, as it does not represent an essential business access point for users in the EU.
Since March, ‘X’ has resisted the gatekeeper label, presenting arguments supported by its financial filings. Despite ‘X’s capability to link advertisers with over 45 million monthly users, the company asserted that it does not exert a “significant impact” on the EU’s internal market. This position is documented in the case filing. A gatekeeper, as per EU regulations, is an entity with an annual turnover exceeding EUR 7.5 billion over three consecutive financial years. ‘X’ demonstrated its revenues fell notably short of this threshold in 2022, a year characterized by Musk’s controversial maneuvers that alienated advertisers, a situation further detailed in an Ars Technica report.
Amidst Musk’s management, ‘X’ emphasized its declining ad revenue and user engagement, particularly within the EU market. The company highlighted that its diminishing advertising scale limits its role as a market gateway. “In the last 15 months, X Ads has experienced declines in both advertising business users and pricing,” ‘X’ reported to the Commission. This combination of factors led the EU to concur with Musk, concluding ‘X’ does not qualify as a gatekeeper. Further insights and analyses are available in the full Ars Technica article.