In a significant ruling on Wednesday, the European Union's second-highest court delivered a mixed verdict for Meta Platforms, Inc. (META.US), partially supporting its legal challenge against the bloc's Digital Markets Act (DMA).

The EU's General Court in Luxembourg overturned the European Commission's decision to designate Meta's Marketplace as a "gatekeeper" core platform service. However, the court dismissed Meta's appeal against the same designation for its Messenger instant messaging application.

In its judgment, the court stated that the Commission's reasoning for classifying Marketplace as an online intermediation service did not meet legal requirements. The court found the explanation insufficient, preventing Meta from fully understanding the rationale and hindering the court's own ability to conduct a proper judicial review.

The ruling noted that the regulator's decision relied on certain evidence and employed an analysis that was "hypothetical and incomplete."

This legal battle stems from the European Commission's move to designate both Marketplace and Messenger as crucial access points for businesses under the DMA. The landmark legislation, which took effect in 2023, establishes a set of rules and prohibitions for major tech platforms, aiming to curb their market power and foster fair competition.

The court's decision means Meta is no longer obligated to comply with the specific duties imposed on "gatekeeper" platforms concerning its Marketplace service. Nevertheless, the company must continue to adhere to the DMA's regulations regarding its Messenger app.

Meta has faced previous regulatory scrutiny over Marketplace. In 2024, the business was fined 798 million euros (approximately $927 million) for breaching the EU's traditional antitrust rules.

Regarding DMA enforcement, Apple (AAPL.US) and Meta were among the first companies to face fines for alleged non-compliance, receiving penalties of 500 million euros and 200 million euros, respectively.