The European Union has initiated investigations into three tech giants, Apple, Google, and Meta, suspecting that they are not adhering to the newly enacted Digital Markets Act (DMA), aimed at fostering competition in digital services.
European Commissioner Thierry Breton has stated that there are suspicions that the practices of these companies may not fully comply with the DMA, which came into effect recently. He warned of potential heavy fines if non-compliance is found.
The DMA mandates that dominant online platforms must provide users with more choices and facilitate fair competition for rivals. Currently, it applies to the three companies under scrutiny, along with Amazon, Microsoft, and ByteDance.
Additional companies, such as Elon Musk’s X and Booking.com, may also be included on the list by mid-May, according to EU announcements.
Violations of the DMA can result in severe penalties, including fines of up to 10% of a company’s global revenue, and up to 20% for repeat offenses, potentially amounting to tens of billions of dollars for the affected companies.
One of the practices being investigated is Meta’s “pay or consent” model, introduced last October with the launch of the “Subscription for no ads” service, allowing European users to pay for ad-free versions of Facebook and Instagram. The European Commission expressed concerns that this model might not offer a genuine alternative if users choose not to consent, potentially leading to the accumulation of personal data by large companies.
A spokesperson from Meta responded by highlighting the widespread use of subscription models in various industries and emphasizing their compliance efforts with regulatory obligations, including the DMA.
The EU is also examining the app stores operated by Apple and Google, focusing on allegations that they restrict app developers’ ability to promote offers outside their platforms without incurring charges.
European Commissioner Margrethe Vestager expressed concerns about recurring fees charged by Apple and Google to app developers, suggesting that these companies might not be fulfilling their obligations.
Apple’s “choice screen” for Safari is also under scrutiny, as it must effectively allow users to select alternative default services, such as browsers or search engines, on their iPhones, as per the DMA requirements.
Apple expressed confidence in its compliance with the DMA and pledged to cooperate with the European Commission during its investigations.
Additionally, the EU is investigating Google’s search practices, particularly whether third-party services appearing in search results are treated fairly compared to Google’s own services like Google Shopping and Google Flights.
Google’s competition executive, Oliver Bethell, defended the company’s approach, stating that significant changes have been made to comply with the DMA and emphasizing ongoing engagement with stakeholders to address feedback and conflicting needs within the ecosystem.
The European Union is conducting investigations into Apple, Google, and Meta’s compliance with the Digital Markets Act, raising concerns about various practices and their potential impacts on competition in the digital services market.
