EU probes Apple, Google and Meta for DMA violations
'We can't just sit around and wait,' says EU industry chief Thierry Breton
The European Commission has launched investigations into tech giants Apple, Google and Meta, marking the first cases under the newly enacted Digital Markets Act (DMA).
The move signals a significant step in the bloc's efforts to curb the dominance of big tech and ensure fair competition in digital markets.
The DMA, which came into effect on 7th March, targets major tech companies designated as "gatekeepers." These firms are required to adhere to a set of regulations aimed at fostering competition and preventing monopolistic practices.
The regulations include provisions to prevent companies restricting app developers from directing users to offers outside their app stores, as well as rules prohibiting preferential treatment of their own services.
The Commission expressed concerns that the gatekeepers' existing measures may not fully comply with the DMA's requirements, prompting investigations into their practices.
EU industry chief Thierry Breton told a press conference that the investigations should not be a surprise.
"The law is the law. We can't just sit around and wait," he said.
One focal point of the investigations is whether Apple is adhering to DMA obligations regarding user freedom on its iOS operating system. Regulators are examining whether Apple allows users to easily uninstall applications, change default settings or access choice screens to switch to rival browsers or search engines on iPhones.
Additionally, concerns about "steering" - limitations hindering app developers from informing users about non-App Store offers - are under scrutiny.
Apple's recent introduction of a fee structure for distributing apps outside of its App Store has raised questions about compliance with the DMA.
Meta's "pay or consent" model for ad-free versions of Facebook and Instagram is also being investigated for its potential impact on user choice and data privacy.
Regulators are also scrutinising Google's potential favouritism towards its vertical search engines such as Google Shopping, Flights and Hotels, over rival services. Concerns about discrimination against third-party services in Google search results will also be investigated.
The Commission aims to conclude its investigations within the next 12 months, with potential fines of up to 10% of the companies' annual global revenue at stake. The outcomes of these investigations could have significant implications for the regulatory landscape governing digital markets in Europe and beyond.
In response to the investigations, the companies have defended their approaches to compliance with the DMA.
"Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA," a Meta spokesperson said.
Google said it has made significant changes to its services in Europe to comply with the regulations and pledged to defend its approach.
Apple expressed confidence in its compliance efforts and reiterated its commitment to engaging constructively with the European Commission.
Amazon, Microsoft and TikTok's parent company ByteDance are also designated "gatekeepers" under the DMA. Amazon has said it is confident in its compliance with the law and its engagement with the European Commission.
Commenting on the Commission's decision, Alex Haffner, a competition partner at law firm Fladgate, said: "The announcement of these probes is a very important development coming so soon after the DMA came into force. Ordinarily, you'd expect lawmakers to give a ground-breaking piece of legislation such as this a period of time to bed in before exercising any powers of oversight/review.
"The fact that the Commission has decided already to consider enforcement action demonstrates how seriously it is taking the new regime and also its absolute insistence on taking pre-emptive action to regulate big tech rather than waiting for complaints about their behaviour to filter in."
The investigations come amid ongoing antitrust scrutiny of big tech companies by both European and US regulators.
Earlier this month, Apple was fined €1.84 billion by the EU following a complaint lodged by music streaming service Spotify, marking the first-ever antitrust fine the bloc has imposed on the company.
Additionally, about a year ago, the EU fined Meta $1.3 billion and instructed it to cease transferring personal information of European users across the Atlantic.
This decision was part of a longstanding case triggered by concerns over US cyber-snooping. Meta criticised the ruling as flawed, and pledged to contest the fine.
Google's previous antitrust penalties in Europe, including a record $5 billion fine in 2018, underscore the regulatory pressure faced by tech giants operating in the region.