EU Launches Investigation into Tech Giants Apple, Google, Meta, and Amazon for Violating Digital Markets Act
The European Commission has initiated a comprehensive investigation targeting Apple, Amazon, Alphabet, and Meta for their non-compliance with the new Digital Markets Act (DMA) on March 25.
The EU’s investigation aims to address anti-competitive practices by these tech giants, which are referred to as “gatekeepers” by the commission.
EU Focuses on Apple, Google, and Meta Practices
In accordance with the announcement, the European Commission has initiated five separate investigations to examine the business practices of Apple, Google, and Meta, which may violate the DMA rules on fair competition.
The investigation will specifically scrutinize Alphabet (Google’s parent company) and Apple’s restrictive “anti-steering” policies. These policies prohibit tech companies from blocking businesses from offering cheaper purchase alternatives outside of their app stores.
The commission explained, “Today, the Commission has opened non-compliance investigations under the Digital Markets Act (DMA) into Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari, and Meta’s ‘pay or consent model.'”
Additionally, an investigation has been launched into Apple’s user preferences. This inquiry will determine if Apple has fully allowed its users to uninstall default apps and change default settings for services such as web browsers on iOS devices.
Alphabet is also facing scrutiny for non-compliance over allegations of abusing dominance in its search engine recommendations for users. The investigation aims to ensure that Google does not prioritize its specialized Google Shopping data over other comparable search results from competitors.
The EU’s investigation will also focus on Meta’s “pay or consent” model for Facebook and Instagram. This policy requires users to either purchase a subscription for an ad-free experience or consent to data tracking on the free version.
Strict Enforcement of the Digital Markets Act (DMA)
The DMA was launched in November 2022 and came into full effect on March 7, 2024. It was designed to promote fair competition in digital markets, which have long been dominated by big tech companies.
EU Commissioner for Competition Margrethe Vestager has stated that despite the launch of the market law in 2022, tech firms “seem to be at odds with the DMA’s intent.”
She has warned that any company found to be in violation of the tech law may face fines of up to 10% of their global revenue, and repeated offenses could result in fines of up to 20%.
Apple has already been fined $1.95 billion by the EU for its anti-steering provisions, which restricted app developers from suggesting cheaper music subscription services to iOS users. The company has also faced accusations of offering “higher fees” and providing a less secure and unresponsive user experience. This occurred before the US Department of Justice filed a lawsuit against Apple for unfair rules targeting crypto apps.
On the other hand, Alphabet has asserted that it is operating in compliance with the digital regulations. This follows a statement by Oliver Bethell, Director of Competition at Alphabet, who claimed that the tech company has made “significant changes” to its operations in Europe.
The EU’s investigation is expected to be concluded within 12 months, providing insight into whether the tech giants have opened up the digital market for fair competition or made changes that primarily benefit their own operations.