The European Commission has initiated an extensive investigation into Apple, Amazon, Alphabet, and Meta for non-compliance practices under the new Digital Markets Act (DMA), marking the EU’s first significant attempt to address anti-competitive practices by tech companies classified as “gatekeepers.” The commission has opened five separate investigations to scrutinize the business practices of Alphabet, Apple, and Meta, focusing on rules related to steering, self-preferencing, user preferences, and pay or consent models that may violate DMA rules on fair competition. The investigations will assess if these companies have been restricting businesses from offering cheaper purchase alternatives outside their app stores and ensuring that users have the freedom to uninstall default apps and change default settings on their devices.
The DMA, which was fully implemented in March 2024, was designed to promote fair competition in digital markets that have long been dominated by big tech companies. EU Commissioner for Competition Margrethe Vestager stated that despite the DMA’s launch in 2022, tech companies appear to be disregarding the intent of the law. Companies found guilty of violating the DMA could face fines of up to 10% of their global revenue, with higher penalties for repeat offenses. Apple was recently fined $1.95 billion by the EU for anti-steering provisions that restricted app developers from suggesting cheaper music subscription services to iOS users. This action by the EU against Apple comes amid ongoing legal challenges in the US, including a lawsuit by the Department of Justice over unfair rules targeting crypto apps.
Alphabet, the parent company of Google, has emphasized its commitment to complying with digital regulations and has made significant changes to its operations in Europe. The company is under investigation for alleged abuse of dominance in its search engine recommendations, particularly in relation to specialized Google Shopping data. The EU’s inquiry into Alphabet aims to ensure that Google does not favor its own services over those of competitors in search results. Additionally, the investigation into Meta’s “pay or consent” model for Facebook and Instagram will examine the requirement for users to choose between a subscription for an ad-free experience or consent to data tracking on the free version.
The European Commission has set a deadline of 12 months for completing the investigations into Apple, Alphabet, and Meta, in order to determine whether these tech giants have complied with the DMA and opened up the digital market for fair competition. The scrutiny of these companies’ business practices is part of the EU’s efforts to enforce the DMA and address anti-competitive behavior in the tech industry. The investigations will shed light on whether the companies have made necessary changes to align with the digital regulations and ensure a level playing field for businesses and consumers in the digital marketplace. Ultimately, the EU aims to hold these tech companies accountable for any violations of fair competition rules and prevent anti-competitive practices that harm consumers and smaller businesses in the digital economy.
