EU investigates Apple, Google, Meta under new digital law

The European Union on Monday launched its first investigation into Apple, Google parent Alphabet and Meta under a massive digital law that could lead to hefty fines on the U.S. giants.

Six companies, including Amazon, TikTok owner ByteDance and Microsoft, are listed as market “gatekeepers” under the EU’s landmark Digital Markets Act, which have been obliged to comply with the new rules since March 7. law.

EU Internal Market Commissioner Thierry Breton said: “We are not convinced that Alphabet, Apple and Meta’s solutions respect their obligations to provide a fairer and more open digital space for European citizens and businesses.”

In a statement announcing the investigation, the European Commission, the EU’s antitrust regulator, said it suspected that the measures taken by the companies so far “failed to effectively comply with regulations.”

The CCIA, one of the main tech lobby groups whose members include the three giants targeted, has slammed the investigations, accusing the EU of “moving too hastily”.

EU competition commissioner Margrethe Vestager insisted regulators would “absolutely” not rush into investigating the companies.

Senior officials acknowledge that change is already happening but say it is not enough.

Under the new rules, the European Commission can fine companies up to 10% of total global turnover. For repeat offenders, this rate can be as high as 20%.

In extreme cases, the EU can order the company to be dissolved.

Unlike traditional rules where investigations last several years, the DMA requires regulators to complete investigations within 12 months of starting.

limiting concerns

Monday’s investigation focused on whether Alphabet’s Google Play and Apple’s App Store allow app developers to display products to consumers for free outside those app marketplaces.

The committee is concerned that the measures taken by the two companies may not be fully compliant as they impose “various restrictions and limitations”.

Alphabet has also faced skepticism over whether Google search results favor its own services, such as Google Shopping or Google Flights, over rivals.

In 2017, the European Union fined Google a huge €2.4 billion ($2.6 billion) for similar self-preference practices.

Google’s director of competition, Oliver Besser, said Google had made “significant changes to how we operate our services in Europe,” adding: “We will continue to defend our approach in the coming months.”

Apple said it was “confident” that its plans meet the DMA’s requirements.

concerns about consent

Apple has also come under scrutiny for whether it allows users to easily uninstall apps on its iOS operating system and the design of its web browser selection screen.

Under the DMA, gatekeepers must provide choice screens for web browsers and search engines to ensure users have more choices.

Meta is also facing issues with its ad-free subscription model, which has been the subject of three complaints since its launch in November.

European users can pay to avoid being tracked by ads, but officials aren’t convinced.

“When you’re faced with a binary choice, we have serious doubts about whether that consent is truly free,” Brereton told reporters.

Meta has faced numerous legal issues in the EU over data processing, including a €1.2 billion fine last year for data privacy breaches.

Meta defended its plan. A spokesperson said: “We designed the ad-free subscription to address a number of overlapping regulatory obligations, including the DMA.”

Attitudes against Apple have turned sour

In addition, the EU regulator will also explore whether Amazon may favor private-label products on the Amazon store and whether Apple’s new fee structure for alternative app stores “may defeat the purpose of its DMA obligations.”

An Amazon spokesperson said it was “in compliance” with the DMA’s requirements.

Monday’s announcement is yet another problem for Apple, which faces a raft of legal challenges on both sides of the Atlantic.

Last week, the U.S. Department of Justice sued Apple, accusing the company of monopolizing the smartphone market.

Just weeks ago, the European Union fined the iPhone maker 1.8 billion euros for preventing consumers from getting cheaper music streaming subscriptions.

Apple said it would appeal the EU fine.