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Twitter under the supervision of the EU Commission? Giegold shoots over the target

The federal government seems alarmed: The latest developments in the short message service Twitter "not only threaten freedom of competition, but also pose a risk to democracy, freedom of opinion, information and the press," writes Sven Giegold, the State Secretary responsible for competition policy in the Federal Ministry of Economics, in a statement Letter to the European Commission.

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Twitter under the supervision of the EU Commission? Giegold shoots over the target

The federal government seems alarmed: The latest developments in the short message service Twitter "not only threaten freedom of competition, but also pose a risk to democracy, freedom of opinion, information and the press," writes Sven Giegold, the State Secretary responsible for competition policy in the Federal Ministry of Economics, in a statement Letter to the European Commission.

In the letter to Margrethe Vestager, the European Commission Vice-President responsible for competition policy and digital affairs and Internal Markets and Industry Commissioner Thierry Breton, Giegold calls for Twitter to be monitored under particularly strict standards. "Current events show that we need close monitoring and vigorous enforcement of existing and future rules," he writes.

The central demand of the Federal Government: The EU Commission should work towards securing direct competition policy supervision via Twitter. The authority would have the necessary instrument in a few days: On January 1, the law on digital markets, English: Digital Markets Act (DMA) comes into force.

The goal is to break the market power of big tech giants. The law provides for special obligations and particularly strict regulation for so-called gatekeepers, digital lock attendants: This means companies that dominate individual markets so strongly that consumers and smaller companies cannot avoid them.

Only: according to experts in the EU, Twitter is by far not economically important enough to be classified as a gatekeeper. For a tech company to qualify as a powerful gatekeeper, it must meet a number of criteria.

In Brussels, these criteria were wrestled for months. Above all, European companies such as Booking.com or Zalando wanted to prevent them from being covered by the new law.

Now the requirements are correspondingly restrictive: a company can be considered a gatekeeper if the company's market capitalization is 75 billion euros or it has had annual sales of 7.5 billion euros in the EU for the past three years. However, Twitter is no longer publicly traded and when it was last listed on October 27, the market capitalization was a good 46 billion euros.

Sales in the EU are also far below the detection limit of the DMA. Twitter made global sales of five billion euros last year, says competition expert Christophe Carugati from the Brussels think tank Bruegel. Sales in the EU are likely to be significantly lower again. Twitter also fails to meet the second major gatekeeper criterion. A digital company is considered particularly powerful if it has 45 million or more active users in the EU. Musk's short message service only has 30 million users in the EU, says competition expert Carugati.

The numbers show that Twitter may have opinions, but economically it is far from playing in the league of the really big tech companies. The companies that could be defined as gatekeepers based on the three criteria from next year include, for example, Meta, Alphabet, Amazon, Apple, Oracle, SAP and Paypal.

There is, however, an alternative way of declaring Twitter a gatekeeper: with the help of a market survey. This is the aim of Giegold's demand. If the result of such a market investigation is that many of Twitter's business partners are completely dependent on the short message service for their business and have no alternative, the company could still be defined as a gatekeeper.

However, Carugati also considers such a result of a market investigation to be unlikely. “This is a typical politician's proposal. It is impossible for Twitter to be classified as a gatekeeper according to the quantitative criteria and it is very unlikely that it will be declared a gatekeeper after a market survey,” says the competition expert.

Andreas Schwab is also skeptical. The CDU politician accompanied the DMA through the European Parliament. "I also find the development on Twitter worrying," says the MEP. “But hasty shots don’t help anyone. The DMA is deliberately formulated for other cases where market power is at stake. We have different rules for protecting freedom of expression and democratic values ​​and we must not mix these two levels.”

In fact, such issues are covered in the Digital Services Act. However, it will not come into force until 2024 – and then the situation on Twitter could look very different again.

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