The European Union has launched investigations into Apple, Google, and Meta (the parent company of Facebook) over concerns about non-compliance with the new Digital Markets Act (DMA), aimed at promoting competition in digital services. The European Commission suspects that practices by all three companies fall short of effective compliance with the new law, and if found guilty, they could face heavy fines. The DMA requires dominant online platforms to provide users with more choices and allow rivals more opportunities to compete, applying to tech giants like Amazon, Microsoft, and ByteDance, with more companies expected to be included in the future.
Violations of the new law can result in significant penalties, including fines of up to 10% of a company’s global revenue and up to 20% for repeat offenses, translating to potentially tens of billions of dollars for the regulated companies. The investigation focuses on Meta’s “pay or consent” approach, where users are given the option to subscribe to an ad-free version of Facebook and Instagram for a fee. The European Commission is concerned that this binary choice may not provide a real alternative for users who do not consent, potentially leading to the accumulation of personal data by large companies.
In addition to Meta, the EU is also looking into app stores operated by Apple and Google, under the suspicion that they may be constraining developers’ ability to communicate directly with end-users and promote offers outside of the dominant app stores. The EU Commissioner for Competition, Margrethe Vestager, expressed concerns about these practices, highlighting issues such as recurring fees charged by Apple and Alphabet to app developers. Apple’s “choice screen” for Safari and Alphabet’s handling of third-party services in Google Search are also under scrutiny, with both companies expressing confidence in their compliance with the DMA and willingness to engage with the investigations.
Google’s competition executive, Oliver Bethell, stated that the company has made significant changes to its services in Europe to comply with the DMA, engaging with the European Commission, stakeholders, and third parties to address feedback and balance conflicting needs within the ecosystem. These investigations into major tech companies are part of the EU’s efforts to ensure fair competition and compliance with regulations to protect consumers and promote a level playing field in the digital marketplace. As the investigations progress, the companies will need to defend their practices and potentially make adjustments to comply with the DMA.
