Summary of Commission Decision of 5 September 2023 relating to a decision pursuant to Article 3 of Regulation (EU) 2022/1925 (Cases DMA. 100017 – Microsoft – Online Social Networking Services; DMA.100023 – MICROSOFT – Number-Independent Interpersonal Communications Services; DMA.100026 – Microsoft – Operating System) (notified under document number C(2023)6106 final)
Date: 2023-09-05
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: advertising, browser, competition law, digital economy, digital single market, operating system, provision of services, search engine, social media








C_202300551EN.000101.fmx.xml












Official Journal of the European Union


EN
Series C













C/2023/551


27.10.2023






Summary of Commission Decision
of 5 September 2023
         
relating to a decision pursuant to Article 3 of Regulation (EU) 2022/1925
(Cases DMA. 100017 – Microsoft – Online Social Networking Services; DMA.100023 – MICROSOFT – Number-Independent Interpersonal Communications Services; DMA.100026 – Microsoft – Operating System)


(notified under document number C(2023)6106 final)


(Only the English text is authentic)
(C/2023/551)


On 5 September 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 Designation Decision (‘the Decision’) designates Microsoft as a gatekeeper pursuant to Article 3 of Regulation (EU) 2022/1925 (‘DMA’) and lists the relevant core platform services (‘CPSs’) that are provided by Microsoft and which individually are an important gateway for business users to reach end users as referred to in Article 3(1)(b) DMA.












(2)


Based on the information in the notification of Microsoft, (2) pursuant to Article 3(4) DMA, and following a detailed assessment of such information, the Decision designates Microsoft as a gatekeeper and lists the following CPSs which constitute an important gateway for business users to reach end users:






a.


Microsoft’s operating system Windows PC OS;










b.


Microsoft’s online social networking service LinkedIn.
















(3)


In addition to these two CPSs, the Decision also finds that Microsoft meets the thresholds set out in Article 3(2) DMA in relation to the following four CPSs, for which Microsoft submitted arguments to rebut the presumptions laid down in the DMA:






a.


Microsoft’s online search engine Bing;










b.


Microsoft’s web browser Microsoft Edge;










c.


Microsoft’s online advertising service Microsoft Advertising;










d.


Microsoft’s number-independent interpersonal communication service (‘NIICS’) Outlook.com.
















(4)


With respect to Microsoft Bing, Microsoft Edge, and Microsoft Advertising, the Decision refers to a separate decision, adopted on the same date of this Decision, opening a market investigation for each of them. For these three CPSs the Commission considers that Microsoft has submitted sufficiently substantiated arguments which manifestly call into question the presumption laid down in Article 3(2) DMA. The market investigations, pursuant to Article 17(3) DMA, will assess further the arguments presented by Microsoft calling into question the presumptions laid down in Article 3(2) DMA.












(5)


With respect to Outlook.com, the Decision accepts the rebuttal because the arguments presented by Microsoft not only manifestly call into question the presumptions laid down in Article 3(2) DMA but also demonstrate that the requirements laid down in Article 3(1) DMA are not fulfilled.




2.   PROCEDURE









(6)


On 3 July 2023, Microsoft notified the Commission, pursuant to Article 3(3), first subparagraph, of the DMA, that it meets the thresholds laid down in Article 3(2) DMA in relation to the following CPSs: (i) its operating system Windows PC OS; (ii) its online search engine Bing, (iii) its web browser Edge; (iv) its online advertising services Microsoft Advertising; (v) its NIICS Outlook.com; and (vi) its online social networking service LinkedIn.












(7)


With its notification, and pursuant to Article 3(5) DMA, Microsoft presented arguments seeking to demonstrate that although its online search engine Bing, its web browser Edge, its online advertising services Microsoft Advertising, and its NIICS Outlook.com, meet the thresholds laid down in Article 3(2) DMA, these CPSs do not satisfy the requirements listed Article 3(1) DMA.












(8)


On 26 July 2023, the Commission sent Microsoft a letter concerning Microsoft’s notification, in which it set out its preliminary views on the assessment of the notification.












(9)


On 2 August 2023, Microsoft submitted written observations in response to the Commission’s letter of 26 July 2023.




3.   LEGAL FRAMEWORK









(10)


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.












(11)


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) 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 end user and business user numbers of a particular CPS in each of the last three financial years.












(12)


Pursuant to first subparagraph of Article 3(5) 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. Second subparagraph of Article 3(5) 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).












(13)


When an undertaking does not satisfy the quantitative thresholds of Article 3(2) DMA but meets the criteria of Article 3(1) DMA, the Commission shall designate this undertaking as a gatekeeper with respect to the specific CPS pursuant to Article 3(8) DMA after conducting a market investigation pursuant to Article 17 DMA.




4.   THE COMMISSION’S ASSESSMENT









(14)


Following the notification by Microsoft and the reply to the Commission’s letter of 26 July 2023, the Decision establishes that the following two notified services constitute CPSs pursuant to Article 2 DMA and that are individually an important gateway for business users to reach end users as referred to in Article 3(1)(b) DMA:






a)


Microsoft’s Windows Client Personal Computer Operating System (‘Windows PC OS’);










b)


Microsoft’s online social networking service LinkedIn.
















(15)


With respect to Windows PC OS, the Decision finds that, in line with recital (14) of the DMA, the delineation of Windows PC OS as a CPS should not be limited to the particular instruction sets x86 and x64 developed by Intel, but should be processor-neutral. This is because both processor-specific versions of Windows PC OS currently offered by Microsoft appear to enable the use and the provision of the same bulk of software applications, and offer the same or similar technological features and services to end and business users.












(16)


Moreover, in line with Microsoft’s views, the Commission considers that the operating system CPS Windows PC OS includes both operating systems installed directly on PCs as well as those delivered as a DaaS solution. Indeed, both AVD and Windows 365 are cloud software services which enable the use of Windows PC OS in the cloud environment. Consequently, and in line with Microsoft’s submission, Windows PC OS delivered through, respectively, AVD and Windows 365 solutions fall within the definition of ‘operating systems’’ as laid down in Article 2(10) DMA.












(17)


With respect to Microsoft’s online social networking service LinkedIn, the Decision first considers, contrary to Microsoft’s view, and in line with the Annex to the DMA, that LinkedIn Marketing Solutions online advertising service is a distinct service from online social networking service LinkedIn. Second, regarding the counting of end users, the Decision considers that all end users that engaged with the service, and not just those logged-in, should be counted and therefore that LinkedIn meets the end user threshold laid down in Article 3(2)(b) DMA.












(18)


With respect to Microsoft’s online search engine Bing, Microsoft’s web browser Edge, and Microsoft’s online advertising service Microsoft Advertising, the Decision considers that they meet, respectively, the definitions of online search engines in Article 2(2)(b) DMA, of web browsers in Article 2(2)(g) DMA, and of online advertising services in Article 2(2)(j) DMA; and that all of them meet the thresholds laid down in Article 3(2) DMA. However, Microsoft argues that these CPSs do not meet the requirements in Article 3(1) DMA because of their smaller scale compared to the overall activities of their respective CPS and, in particular, vis-à-vis the leading search engine Google Search, for Bing, the leading web browser Google Chrome, for Edge, and other online advertising services such as Google’s and Meta’s, for Microsoft Advertising. For these three CPSs, the Decision refers to a separate decision adopted on the same date of this Decision opening a market investigation given that Microsoft has presented sufficiently substantiated arguments manifestly calling into question the presumptions in Article 3(2) DMA.












(19)


Furthermore, Microsoft submitted that its online advertising service Microsoft Advertising should be delineated as a distinct service, separate from Microsoft’s other online advertising service, LinkedIn Marketing Solutions. Based on the information that Microsoft provided, the Decision considers that LinkedIn Marketing Solutions constitutes a commercially and organisationally separate online advertising service that serves a different user base than Microsoft Advertising.












(20)


With respect to Microsoft’s NIICS Outlook.com, the Decision accepts Microsoft’s rebuttal and does not list it in the Decision as a CPS that is an important gateway for business users to reach end users. This is for the following reasons: (i) Microsoft has configured and currently provides Outlook.com on open standards that allows business users and end users to effectively exchange messages with other users of Outlook.com, which is further corroborated by the data provided by Microsoft (only a small percentage of messages exchanged on Outlook.com relate to communications where both the sender and the recipient were end users or business users of Outlook.com); and (ii) because Microsoft, in the current configuration of Outlook.com, does not exert any control over the operations of end users or business users of Outlook.com that would enable it to make those end users or business users dependent on Outlook.com to reach each other.












(21)


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









(22)


For the reasons set out above, the Decision designates Microsoft as a gatekeeper in relation to (i) Microsoft’s operating system Windows PC OS; and (ii) Microsoft’s online social networking service LinkedIn.












(23)


Finally, the Decision accepts the rebuttal arguments raised by Microsoft in relation to its NIICS Outlook.com.






(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).

(2)  Notification of 3 July 2023 made pursuant to Article 3(3) DMA.


ELI: http://data.europa.eu/eli/C/2023/551/oj
ISSN 1977-091X (electronic edition)