Apple, Google and Meta face first investigations under EU’s Digital Markets Act

EU antitrust regulators have set their sights on tech behemoths Apple, Alphabet (Google’s parent company), and Meta Platforms (formerly Facebook) in the bloc’s first Digital Markets Act probes. The move potentially paves the way for significant fines against the companies. 

The Digital Markets Act, which came into effect on March 7, imposes obligations on six designated “gatekeepers” – firms providing services like search engines and social networks that are utilized by other businesses. These obligations aim to create a fair playing field for competitors and offer users increased choices in the digital sphere.

Following their designation under the pan-EU regulation last fall, the three gatekeepers are now under formal investigation in these sectors to ascertain if they are contravening the rulebook, as suspected by the Commission. Should violations of the DMA be confirmed, fines of up to 10% of global annual turnover may be imposed, with the possibility of an increase to 20% for repeat offences.

EU industry chief Thierry Breton defended the investigations, asserting that adherence to the law is paramount and cannot wait. Meta, particularly, faces scrutiny for its introduction of a no-ads subscription service in Europe, with rivals and users alike expressing concerns. Breton suggested that Meta should provide free alternative options, aligning with the DMA’s guidelines. Similarly, both Google and Apple have introduced new fees for certain services, prompting examination into their compliance with the Act.

A Meta spokesperson emphasized the company’s commitment to complying with the Act’s provisions, citing the Subscription for No Ads service as addressing regulatory obligations. Meanwhile, Google stated its intention to defend its approach, citing significant changes to its services. Apple expressed confidence in its plan aligning with the Digital Markets Act. Notably, the Commission is also investigating Apple’s new fee structure for alternative app stores and Amazon’s ranking practices on its marketplace.

The EU executive aims to conclude these investigations within a year, in line with the timeline outlined under the Digital Markets Act. To facilitate the probes, the companies have been instructed to retain specific documents, ensuring access to relevant information. These investigations come amidst mounting criticism from app developers and business users regarding perceived shortcomings in the companies’ compliance efforts. As the regulatory landscape evolves, these probes signal a significant shift towards greater scrutiny and accountability for tech giants operating within the EU market.

The EU today also announced “investigatory steps” concerning Amazon, citing concerns over the company’s ranking practices on its marketplace. The Commission suspects that Amazon “may” be prioritizing its own brand products, potentially violating the DMA. However, it’s important to note that this action does not constitute a formal non-compliance procedure. In response, an Amazon spokesperson stated, “Amazon is compliant with the Digital Markets Act and has engaged constructively with the European Commission on our plans since the designation of two of our services. We continue to work hard every day to meet all of our customers’ high standards within Europe’s changing regulatory environment.”