Freshfields represents Meta on the first successful challenge under the EU Digital Markets Act before the EU General Court

Freshfields has successfully represented Meta Platforms Inc (‘Meta’) in overturning the European Commission's decision to designate Facebook Marketplace as a core platform service ('CPS') under the EU Digital Markets Act (‘DMA’).

In its judgment, the Court annulled the designation of Facebook Marketplace as an “online intermediation service” (‘OIS’) CPS.  The ruling confirms that, even under the DMA's presumption-based designation framework, the Commission must take proper account of the facts as they stand at the time of designation and provide a clear and reasoned explanation for its conclusions.

The Court found that the Commission’s decision erred in law and lacked sufficient reasoning since it failed to provide any concrete analysis of how changes made by Meta prior to the designation decision — designed specifically to prevent business use of Facebook Marketplace — affected the Commission’s finding that Facebook Marketplace enabled business users to offer goods and services to consumers, as is required to classify a service as an OIS CPS.  It has held that the Commission was required under the DMA to take those changes into account, and that its failure to do so allowed neither Meta to understand the reasons for its classification as an OIS CPS nor the Courts to exercise their power of review.

The judgment also considers novel questions concerning the treatment of integrated services under the DMA in its assessment of Facebook Messenger, the CPS designation of which has been upheld by the Court. 

The Court’s judgment marks the first time a Commission decision under the DMA has been successfully challenged.  It provides important guidance on the interpretation and application of the DMA by the Commission, and particularly the process by which the Commission can designate a CPS.

The Meta in-house legal team was led by Tim Lamb (Vice President and Head of EMEA Competition and Regulation) and Anatole Hutin (Associate General Counsel, EMEA Competition and Regulation).

The Freshfields team was led by partners Sharon Malhi, James Aitken, Alvaro Pliego Selie, Thomas Janssens, Aaron Green and Tone Oeyen, and supported by principal associate Ole Schley and associates Saif Gilani and Conor Leavy.

The Brick Court Chambers team was led by David Bailey KC and Daniel Jowell KC.

The Frontier Economics team was led by David Foster, David Lawrence and Alex Katz.