April 22, 2024

EU Launches Digital Markets Act Probes into Tech Giants Apple, Alphabet, and Meta

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The European Union (EU) has initiated investigations into tech behemoths Apple, Alphabet (Google), and Meta (formerly Facebook) under its recently implemented Digital Markets Act (DMA) legislation. This marks the first probe under the sweeping new tech regulation, targeting alleged anti-competitive practices and violations of digital market rules.

The investigations focus on several key areas:

  1. Apple and Alphabet’s Anti-Steering Rules: The probes into Alphabet and Apple scrutinize their anti-steering rules, which prohibit businesses from informing users about cheaper alternatives or subscriptions outside of their app stores. Margrethe Vestager, EU competition chief, expressed concerns during a press conference, suggesting that the implementation of these rules by Apple and Alphabet appears to contradict the DMA’s provisions.
  2. Apple’s Compliance with DMA Obligations: The EU is examining whether Apple has complied with DMA obligations concerning the ease of app uninstallation on iOS devices and the provision of choices for changing default settings, such as web browsers and search engines.
  3. Alphabet’s Display of Google Search Results: The Commission is investigating whether Alphabet’s display of Google search results favors its own services over rival offerings, potentially leading to self-preferencing.
  4. Meta’s “Pay and Consent” Model: Meta’s ad-free subscription model for Facebook and Instagram in Europe is under scrutiny, with regulators assessing whether the binary choice imposed by Meta’s “pay or consent” model effectively provides a genuine alternative for users who do not consent, as mandated by the DMA.

Thierry Breton, the EU’s internal market commissioner, emphasized the importance of offering free alternative options for less personalized services, particularly for large tech firms labeled as “gatekeepers” under the DMA.

Both Apple and Meta have defended their business practices. Apple stated its confidence in DMA compliance and reiterated its commitment to engage constructively with the European Commission. Meta emphasized that subscriptions are a common business model and stressed the need for personalized services.

The Commission intends to conclude its probes within 12 months, with potential penalties for infringements including fines of up to 10% of the tech firms’ total worldwide turnover. These penalties may increase to 20% in case of repeated infringement.

Furthermore, the Commission is also examining Amazon’s potential preferencing of its own brand products on its e-commerce platform and scrutinizing Apple’s new fee structure and terms and conditions for alternative app stores.

While the investigations unfold, Vestager affirmed the Commission’s determination to ensure compliance with the DMA and emphasized its commitment to use all available tools to prevent circumvention or undermining of DMA obligations by gatekeeper companies.

Financial Desk

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