European Union regulators have launched investigations into Alphabet, Apple, and Meta for potential violations of the region’s new competition law, the Digital Markets Act. This law requires tech giants to open up their platforms to allow smaller rivals more access to users, impacting app stores, messaging services, internet search, social media, and online shopping. The investigations are part of the EU’s efforts to enforce these competition rules more tightly and the companies could face fines of up to 10 percent of their global revenue.
Apple and Alphabet are being scrutinized for favoring their own app stores to limit competition, while Google is also facing investigation over the display of search results in Europe. Meta will be questioned about a new ad-free subscription service and its use of data for advertising. These investigations add to the global regulatory scrutiny large tech companies are facing, with the Justice Department recently suing Apple for antitrust violations.
In response to the investigations, the companies have announced various changes to their products and business practices to comply with the Digital Markets Act. However, European regulators have stated that these changes have not gone far enough, prompting the launch of formal investigations. The European Commission has 12 months to complete its investigations and could impose significant fines on the companies if any violations are found.
The Digital Markets Act, passed in 2022, gives European regulators more authority to force tech giants to change their business practices without lengthy antitrust lawsuits. The law prohibits the companies from favoring their own services over those of rivals. As part of the investigations, Alphabet, Apple, and Meta will be required to disclose more information on their business practices, including changes they have made to comply with the new rules.
Apple announced in January that developers would have new ways to reach customers in the EU, while Google adjusted its products, and Meta introduced a subscription service for users to access Facebook and Instagram without ads for a fee. Regulators expressed concerns about Meta’s subscription model, stating that it may not offer a real alternative for users who choose not to consent to targeted advertising. While the companies have pledged to cooperate with the investigations, concerns remain within the tech industry about how aggressively the law will be enforced.
In addition to Alphabet, Apple, and Meta, regulators are also gathering information on Amazon’s compliance with the Digital Markets Act. The company is facing scrutiny for potentially favoring its own products in its online store, in violation of the law. These investigations signal the EU’s commitment to cracking down on anti-competitive practices in the tech industry and ensuring fair competition for all companies operating within the region.
