# X Evades EU Gatekeeper Classification by Referencing Decreased Ad Income and User Participation
In a pivotal turn for Elon Musk’s social media venture, X (previously Twitter), the European Commission (EC) has determined that the platform does not meet the criteria to be labeled a “gatekeeper” under the European Union’s Digital Markets Act (DMA). This ruling follows extensive lobbying efforts by X to evade the strict regulations associated with the gatekeeper classification, which is assigned to entities that significantly influence the EU’s internal market.
## What is the Digital Markets Act?
The **Digital Markets Act (DMA)** represents a groundbreaking legislative initiative by the European Union aimed at overseeing major tech firms that serve as “gatekeepers” in the digital landscape. Gatekeepers are platforms that manage access to a vast user base and are crucial for businesses aiming to connect with consumers. The DMA’s purpose is to foster fair competition and prevent these companies from misusing their powerful positions.
To be designated as a gatekeeper, a company must fulfill various criteria, which include having a major influence on the internal market, delivering a core platform service that links businesses to users, and holding a robust, entrenched market position. Firms meeting these benchmarks face additional regulations, which encompass limitations on data usage and interactions with rivals.
## X’s Case Against Gatekeeper Designation
Since Elon Musk’s takeover of Twitter in 2022, X has encountered considerable obstacles, particularly related to decreasing advertising income and user participation. These complications became focal points in X’s case against receiving the gatekeeper label under the DMA.
In a case filing presented by X, the platform’s **advertising income** and **user base** have both consistently diminished in the European Union since Musk’s acquisition. X contended that although it links advertisers to over 45 million monthly users, it does not exert a “significant impact” on the EU’s internal market. The company further underscored that its annual revenue in the EU was below the €7.5 billion benchmark necessitated for gatekeeper classification.
X additionally pointed out that its portion of the online advertising market in the EU is too minimal to be regarded as an “important gateway” for businesses to connect with consumers. The platform stated that it primarily specializes in **brand advertising**, as opposed to direct response advertising, which necessitates more sophisticated targeting and metrics tools. This, X claimed, places it at a disadvantage compared to larger rivals like Meta and Google, which possess more advanced advertising capabilities.
### Declining Ad Income and User Participation
A crucial aspect of the EC’s ruling was the evidence submitted by X indicating a **decrease in advertising income** and **user participation**. Since Musk’s takeover, the platform has struggled to maintain advertisers, many of whom have been put off by modifications to content moderation policies and worries about their ads being displayed alongside extremist content.
X’s submission disclosed that the platform’s **monthly active users** in the EU are markedly fewer than those of its counterparts. For instance, X asserted that its user base is 133% smaller than that of Facebook or Instagram, 60% smaller than LinkedIn, and 27% smaller than TikTok. Moreover, the platform contended that its user engagement has been consistently declining, further undermining its market position.
### Absence of Platform Authority
X further argued that it lacks the “platform power” to shape the online advertising market in the same manner as other gatekeepers, such as Meta or Google. Unlike these companies, X solely provides **first-party advertising** on its platform and does not possess the capability to track users across multiple platforms. This restricts its ability to furnish advertisers with the same quality of data and insights that other gatekeepers can provide.
Ultimately, the EC concurred with X’s reasoning, determining that the platform does not possess the scale or influence to be regarded as a critical gateway for businesses aiming to connect with consumers. Consequently, X eluded the gatekeeper classification and the additional regulatory obligations that accompany it.
## The Implications of the Ruling
For X, this ruling represents a considerable triumph. Evading gatekeeper status under the DMA signifies that the platform will not be liable to the stringent regulations that other technological giants, such as Meta, Google, and Apple, must follow. This affords X greater leeway in its operational strategies and enables it to pursue its business objectives without the heightened scrutiny that accompanies being a gatekeeper.
Nevertheless, the ruling also underscores the difficulties X faces in the European arena. The platform’s dwindling ad income and user engagement are evident indicators that it is having a hard time competing with larger, more entrenched players in the social media and online advertising sectors. While sidestepping gatekeeper status may offer some respite in the immediate future, X must seek strategies to reverse these trends if it intends to sustain its competitive edge over time.
### Possible Future Challenges
Despite this achievement, X’s future remains unpredictable. The European Commission has signaled that it will persist in monitoring the platform’s performance and
