The Chicken or Egg Dilemma: The General Court Partially Annuls the European Commission’s DMA Designation Decision Against Meta (Case T-1078/23)

The General Court (GC) issued its second ruling relating to the European Commission’s (EC) role in designating undertakings as gatekeepers under the Digital Markets Act (DMA) in its judgment of 3 June 2026. Carrying a similar underlying rationale as compared to its previous ruling in ByteDance v Commission (Case T-1077/23, see a comment on it here and a few remarks on its appeal before the Court of Justice here), the GC reinstated the EC’s findings with regard to the designation of Meta’s messaging service Messenger.

The GC set before us a question anew: which came first, the chicken or the egg? Or, translating it into antitrust terms, which came first, the finding of an abuse or the exclusion of any objective justification thereof? Or going even further, which came first, an undertaking’s designation as a gatekeeper or the EC’s rejection of all causes for a rebuttal? When one reads the ruling, it is quickly apparent that, contrary to the common belief that it must be the egg that predates the chicken, one cannot really set apart chicken from egg. This newsletter explores how we might be, once more, before a riddle when it comes to gatekeeper designations under the DMA.

The Egg, the Chicken and Facebook Messenger

Let’s start at the very beginning. In September 2023, the EC designated six services provided by Meta as core platform services (CPSs), including Facebook, Instagram, WhatsApp, Meta Ads, Messenger and Facebook Marketplace (see comment here).

The newly designated gatekeeper appealed the EC’s decision on two distinct fronts. First, on the enforcer’s delineation of Messenger with respect to Facebook, given that the gatekeeper considers that they can be understood as providing one and the same (and not standalone and separate) services. Second, on the EC’s characterisation of Facebook Marketplace as an important gateway for business users to reach end users under the requirement under Article 3(1)(b) DMA. The chicken or egg dilemma relates to the former ground of appeals, regardless of the fact that the latter opens up a different type of predicament as a consequence of the GC’s ruling. But more on that a bit later.

From the designation decision, we could already anticipate the points of contention that the different parties were going to discuss in the appeal before the Courts. Meta argued that Messenger cannot be neatly disassociated from its social network Facebook because they both cater to the same user intentions (i.e., connecting, communicating, sharing content and discovering new content) and their functions are intertwined, in a similar vein to other chat functions of other social networks, such as Instagram or TikTok (paras 159 and 164 of the designation decision). The undertaking established that “breaking the link between Facebook and Messenger through the designation of Messenger as a separate CPS would (…) be artificial and inconsistent (with the DMA)” (para 161). The EC settled the issue based on three main arguments: i) that Meta had developed an standalone application for Messenger, in particular for mobile devices (para 177); ii) that users may use Messenger whether their Facebook account is activated or deactivated and whether or not they are active at the same time on Facebook (para 169); and iii) that Meta provides and promotes tools that are specific to Messenger which allow businesses to engage with an expansive user base (para 181). On the designation’s appeal to the General Court, this was the main point of disagreement between both parties, i.e., whether the EC correctly applied the legal standard for designation (and rebuttal).

This is precisely where the chicken-and-egg dilemma unfolds. Meta seeks the annulment of the designation decision with respect to its Messenger functionality on four counts relating to its delineation from Facebook, its consideration as a number-independent interpersonal communications service (NIICS), the outright rejection of its rebuttal of the quantitative presumptions and with regard to the breach of its rights of defence. The GC engages with the resolution of each of these individually but takes a clear resolution by presenting the three arguments set out by the EC (see in the paragraph above) as escape routes to settle the robustness of the designation decision.

Regardless of the merits of those reasons (that I will go into in a minute), one wonders how they can systematically play a part in every single ground of appeal presented by the undertaking, to the extent that they respond to questions of Messenger’s delineation, translation as a CPS and rebuttal of its gatekeeper position. Going back to our dilemma, which came first? The chicken, i.e., designating Messenger as a CPS based on a cluster of reasons, or the egg, i.e., the reasons themselves for its designation, which can be rebutted by the undertaking to escape its capture by the ex-ante regulation.

The GC already struggled (or at least, I think it did, in terms of the soundness of its ruling) with the legal standard that is enough to rebut the quantitative presumptions underlying designation in its ByteDance v Commission judgment. In that ruling, it basically left the door open to consider that rebuttal arguments can either be taken individually or as a whole so as to balance out the EC’s decision in one direction or another (para 333 of the ruling). That is to say, designation can either take the form of a cluster of reasons characterising the undertaking as a gatekeeper or a key argument that tilts the balance in favour of designation. With the GC’s position regarding Meta’s designation decision, we do not know yet what the solution is, although we do know that arguments operating in favour of designation can play different roles along the designation process, such as in delineation, rebuttal and a service’s characterisation as a CPS.

The European Commission’s delineation of Messenger from Facebook

The GC did not present any novel argument with regard to the delineation of Messenger from Meta’s social network when confronted with the designation decision. The court highlighted the same reasons as the designation decision to agree in that the EC was fully entitled to reach the conclusion that Messenger is a separate CPS from Facebook (paras 42-44 of the Meta ruling).

Expanding on these reasons, the GC responded to additional points that Meta had raised at the judicial proceedings, notably the overlap between monthly active end users of Messenger and Facebook (paras 46, 50 and 51). The evidence proposed by the gatekeeper was directly rejected as having any significance for operating the delineation since they did “not demonstrate that Messenger and Facebook (can) be viewed as being a single CPS for the purposes of the DMA” (para 50), given that a “partial overlap between monthly active end users of Messenger and Facebook (is) not surprising, given Meta’s choice of using the Facebook ID as an identifier for the use of Messenger” (para 54). The GC reaches the same conclusion when backing the EC’s methodology in calculating Messenger’s end users, which necessarily included a huge overlap with Facebook’s own (para 151).

Aside from the substantial reasons that Meta believed demonstrated the integration between both services, the gatekeeper also alleged that the EC had distorted Meta’s public marketing materials, its communications to investors and users, and its financial reports so as to misrepresent their de facto separation (para 58). For instance, in the designation decision, Meta had referred to Form 10-K for the fiscal year ending on 2022 where the undertaking distinguished four services within its family of products, namely, Facebook, Instagram, Messenger and WhatsApp (para 58 of the designation decision).

One must recall that the EC interpreted that it could set apart distinct CPSs when they are offered in an integrated way, when they do not belong to the same CPS category or are used for different purposes.  (find my paper here on why deviations from the legal standard ensued during the designation process).

The GC recognises that, as a matter of fact, the CPS delineation “must be assessed from the objective point of view of end users”, but adds that the documents addressed to investors (or business users) are not to be considered entirely irrelevant since they “may provide information, along with other consistent evidence (…) on the manner in which the service provider configures its services for the users in question” (para 60 of the Meta ruling). In other words, the GC expands the EC’s discretion in integrating different bits and pieces of information so as to portray a particular image that favours the legal conclusion it seeks, regardless of the nature or the addressees of that particular documentation.

Both, And: Messenger’s characterisation as a NIICS

The EC designated Messenger as a NIICS (aka a messaging service) since it enables users to communicate with other individual users or within groups via text, voice calls, video calls and to share pictures, videos, their position and other content (paras 165-66 of the designation decision). In practice, that meant that Messenger had to comply with one of the most resource-intensive provisions under the DMA, Article 7, which mandates horizontal interoperability with the gatekeeper’s messaging services. No business user has sought interoperability with Messenger for the moment being.

On appeal, Meta did not necessarily contest that it does not meet the NIICS definition. Rather, it argued that Messenger can a priori fall within two different CPS categories, namely that of a NIICS CPS and an online social networking CPS, so that an evidence-based assessment through a market investigation was necessary to determine in concreto the CPS category which best fits such a service (para 83 of the Meta ruling).

The GC believes that the EC’s reasoning was sound because it was based on the EU legislature’s intention. Given that gatekeepers often provide NIICSs as part of their platform ecosystem, which further exacerbates entry barriers for alternative providers of such services and increases switching costs for end users, the EU legislature “was fully aware of the complexity of the composition of certain platform ecosystems that include, inter alia, complementary services which could overlap or be interconnected and, more specifically, that NIICSs, such as Messenger, were often supplied within such ecosystems” (para 98). In addition, the GC refers back to the main arguments that it already held as key to consider that Messenger was separate from Facebook to establish its description as a NIICS, notably its provision in a self-standing application for mobile devices, the specific tools it enabled for Messenger and Meta’s communications with its investors, public marketing communications and financial reports (para 102).

Here we come once again to our chicken-and-egg dilemma. The GC uses three main reasons to justify the EC’s entire characterisation of Messenger as a CPS to gatekeeper Meta. And after that, it asserts that no counterargument can be held to annul the contested decision. For instance, the GC recognises that Meta might have had a point in signalling that the EC should have triggered a market investigation because Messenger met the description (and thus, purpose) of two types of CPSs (as set out in para 100), but plays its relevance to operate the annulment down given that “the Commission in any event carried out a specific analysis of the conditions and circumstances in which Messenger was provided” (para 104).

From this statement, the GC signals the probative efforts that the EC must engage in when designation is operated. As the EC’s representatives indicated in the hearing before the Court of Justice in the appeal of the ByteDance v Commission case (see comment here), the burden of proof rests with the undertaking seeking to discharge the presumption that it meets the gatekeeper requirements under Article 3(1). In turn, it is for the enforcer to conduct a specific analysis of the arguments that Meta set forth to disprove its characterisation as a gatekeeper. Later on, in the ruling, the GC describes the EC’s explanations as clear and unequivocal (para 172). The EC is not, however, forced to perform a broader ‘all-circumstances’ analysis of the reality of the service to account for each tenet of the legal requirement.

Following the EC’s representatives opinion at the hearing before the CJEU, this applies to both the designation process when it is operated through the direct application of the quantitative presumptions (and all reasons on the contrary are rejected) and when the EC conducts a market investigation. The GC’s statement falls within the same spirit, due to the fact that no materially different solution would have resulted from the EC’s conducting of a market investigation. In this same sense, the GC goes on to say that the EC was not required to open a market investigation because the arguments submitted by Meta were not sufficiently substantiated to manifestly call into question the presumptions laid down in Article 3(2) (paras 171 and 172).

The reasoning seems counterintuitive enough, though. What would the point be to conducting an in-depth market investigation to enquire into the circumstances in which the CPS operates if the EC’s probative efforts do not fundamentally change as a consequence? One can only think that the market investigation under Article 17(3) DMA accounts for the backing of the EC’s pre-conceived beliefs originating in the designation process, and not an opportunity to observe the broader circumstances in which the CPS operates, which can end in falling to either side of the argument.

The proof is in the (egg) pudding

The chicken or egg dilemma plays out in the opposite direction when the GC analyses the EC’s designation of Meta’s Facebook Marketplace as an online intermediation service.

Going back to the designation decision, the main crux of the designation operated against Facebook Marketplace lied on the accounting of the service’s business users. According to Meta, it could not be considered an important gateway for business users to reach end users under Article 3(1)(b) DMA (and did not meet the presumption paired with it), because it is a C2C service designated for end users to reach other end users. Meta supported the claim by pointing to Facebook’s and Instagram’s EEA Commerce Products Disclosure terms, which stipulate that only consumer sellers may list items for sale on Marketplace. On top of that, Meta argued that Facebook business users no longer had the ability to create any listing on Marketplace from their Facebook business Page since 30 January 2023, when Meta removed the functionality (para 239 of the designation decision).

Surprisingly, the EC decided to double down on its argument that Facebook Marketplace had to be designated under the myopic impression that “for the purpose of designation pursuant to Article 3 DMA, it must consider information from the last three financial years before designation takes place (i.e., 2020, 2021 and 2022). Consequently, the fact that Meta implemented changes in January 2023 (…) (has) no bearing on the finding that Marketplace is not an exclusively C2C platform” (para 256). Thus, 6 months after the designation, Facebook Marketplace was compelled to comply with all applicable provisions of the regulation (and implemented some changes to its interface).

A few days prior to the compliance deadline set out in March 2024, Meta submitted a request to the EC to re-consider its decision with additional measures that it had implemented in December 2023 and January 2024, so as to avoid further designation, notably effective measures against potential breaches of its EEA Commerce Products Disclosure Terms by business users and the removal of public-facing language which the designation decision claimed could be understood as encouraging business users to continue to make listing via their personal profile (para 11 of the EC’s amendment of its decision relating to Facebook Marketplace). The EC sent three requests for information to reevaluate its decision in April, November 2024 and January 2025 (paras 3-5).

It was not until the second compliance deadline that the EC de-designated Facebook Marketplace due to the substantial changes in the facts on which the designation decision was based, in particular, the additional enforcement and monitoring measures adopted by the gatekeeper in December 2023 and January 2024 against breaches of its EEA Commerce products Disclosure Terms (para 35).

Due to the fact that Marketplace had been, in the end, de-designated as a CPS, the GC considered whether Meta still had a legal interest in bringing the proceedings for the annulment of the designation decision, given that after the EC’s decision it had maintained its plea in full (para 27 of the Meta ruling). The GC rightly pointed out that the effects of a repeal of a part of the designation decision did not give rise to the same legal effects as an annulment, insofar as it does not amount to the recognition of its illegality and takes effect ex nunc, whereas the annulment would take effect ex tunc (para 30). In practical terms, the de-designation meant that Meta had already invested in implementing the DMA provisions, to the extent that the designation decision had produced legal effects with respect to the period running up to its repeal (para 31). Thus, the GC asserted Meta’s legal interest in reviewing the EC’s designation decision to explore the potential ex tunc impacts, were the court to annul that part of the designation decision (para 33).

The GC mainly assessed Facebook Marketplace’s characterisation with regard to its categorisation as an online intermediation service. Article 2(5) DMA refers back to Article 2(2) of the P2B Regulation to describe online intermediation services. They are services which: i) constitute information society services; ii) allow business users to offer goods or services to consumers, with a view to facilitating the initiating of direct transactions between those business users and consumers, irrespective of where those transactions are ultimately concluded; and iii) are provided to business users on the basis of contractual relationships between the provider of those services and business users which offer goods or services to consumers.

On the basis of Article 2(2) of the P2B Regulation, Meta argued that the EC’s designation decision contained no meaningful reasoning to explain why the EC had found, following the changes of July 2023, that there could still be a material number of business users on the service (para 214). Although the GC could not blame the EC for accounting for business users for the purposes of the application of the quantitative presumptions under Article 3(2) in the three preceding years to designation, i.e., 2020, 2021 and 2022 (because it is technically right), it added that “the EU legislature has not provided that the assessment of the classification of a CPS service under Article 2(2) DMA must be carried out on the basis of information relating to a period preceding the year of designation” (para 225). This is the GC’s nice way to say that the EC cannot ignore the current outset and circumstances of a service it wishes to designate as a CPS just because the quantitative presumptions are designed in such a way that they take into account a different timeframe into account.

The GC went on to condemn the EC’s position for its incompatibility with Article 3(3) of the DMA’s Implementing Regulation which lays down an obligation for an undertaking, while the notification is under review (as it was in July 2023, after Meta’s notification in June 2023 and before the EC’s designation deadline in September 2023), to communicate without undue delay any material changes in the facts presented in the notification to the Commission (para 228). It follows that if the undertaking must communicate any change of circumstances relevant to designation, the EC must take into account those facts to tailor its designation decision, too.

In this sense, the GC presses on the definition of Article 2(2) of the P2B Regulation not being fully met by Facebook Marketplace. The definition requires that business users should be able to offer goods to consumers, with a view to facilitating the initiation of direct transactions with consumers. To meet the definition, the EC used the ‘power sellers proxy’ to identify business users on Marketplace. In other words, the EC assumed that business users were covertly accessing Facebook Marketplace (in breach of Meta’s policy back then) and the high frequency or number of listings of the same kind indicated that a user was acting in a professional or commercial capacity (aka a business user) (para 258 of the designation decision). The GC notes that the EC’s attempts in integrating the July 2023 changes into its designation decision were treated “at most in a marginal fashion” and that it did not provide “any specific analysis of the changes (…) in order to support its finding that, despite the implementation of those changes, Marketplace satisfied the definition of an online intermediation service” (paras 243 and 254 of the Meta ruling). Despite the fact that Meta had, in fact, assumed the EC’s power sellers proxy and implemented additional measures to limit the number of listings that an end user was able to make on Marketplace as per the EC’s own methodology, the designation decision accounted for them as “future limitations that Meta is in the process of implementing” (para 256). Therefore, this meant that the EC did not disclose in a clear and unequivocal fashion the reasons why it found that Marketplace fulfilled the online intermediation service definition (para 257).

The GC concludes by arguing that these changes meant that Marketplace “no longer had any business users on the basis of the power sellers proxy used by the Commission to identify them in the decision” (para 266). At the very least, the GC points out that the EC should have provided appropriate and sufficient reasons to explain how it took such changes into account, but they pre-emptively meant that Facebook Marketplace should not have been designated in any case. For that reason, the GC annuls that part of the designation decision, provoking ex tunc effects with regard to Facebook Marketplace’s position.

However, reverting the situation prior to designation might prove more difficult than what the court might anticipate. In its 2024 compliance report, Meta introduced several changes to the interface in which Facebook Marketplace operates, including the possibility of accessing the service as a standalone (and not directly through Facebook) and eliminating the Facebook login screen gating the Marketplace experience on desktop and mobile to comply with Articles 5(2) and 5(8) DMA (pages 20-22 and 27-28 of Meta’s 2024 compliance report). Aside from that, in the second iteration of the compliance deadline, Meta introduced additional tools and metrics for Facebook Marketplace users to effectively comply with Article 6(10) DMA (page 53 of Meta’s 2025 compliance report).

One can only wonder how the ex tunc impact will materialise in the present case. It’s true that the changes added to securing fairer and more contestable scenarios in Meta’s ecosystems, but at the price of misrepresenting the terms of the DMA. As commendable as those results might be, there may well be a chance for the gatekeeper to now exercise an action based on Article 340 TFEU.