Fast Facts
- The European Commission on Monday opened an investigation under the Digital Markets Act into Apple, Alphabet and Meta.
- This regulatory push comes on the heels of similar action against Big Tech in the U.S.
The European Commission on Monday opened a series of new investigations under the Digital Markets Act (DMA) into Apple (AAPL) , Google (GOOG) and Meta (META) .
The Act — which became enforceable March 7 — designated six tech companies as "gatekeepers." The legislation holds that each of these "gatekeepers" must be compliant with a series of obligations designed to prevent the "gatekeepers from imposing unfair conditions on businesses and end users," and to ensure "the openness of important digital services."
Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft make up the six gatekeepers designated by the DMA.
If the European Commission finds any of these companies to be in noncompliance with the DMA, it will impose fines of up to 10% of that company's global revenue, a number that would double for repeat offenders.
Less than a month after coming into force, the Commission is investigating three of the six for such noncompliance.
Related: Tennessee takes a stand against a controversial tech issue
Apple's alleged noncompliance
The Commission is investigating Apple for two potential violations. The first relates to steering rules laid out in the DMA, which require gatekeepers to allow app developers to "steer consumers to offers outside of the gatekeepers' app stores" at no cost.
The Commission said that Apple imposes various restrictions and limitations, adding that it is concerned that the company's measures "fall short" of compliance with the Act.
The Commission is also investigating Apple's compliance with user choice obligations, which require that Apple prompt users to easily select alternative default services, such as web browsers, that users must be easily able to uninstall software applications on IOS and that users must be easily able to change default settings.
“We’re confident our plan complies with the DMA, and we’ll continue to constructively engage with the European Commission as they conduct their investigations," an Apple spokesperson told TheStreet. "Teams across Apple have created a wide range of new developer capabilities, features and tools to comply with the regulation."
"At the same time, we’ve introduced protections to help reduce new risks to the privacy, quality and security of our EU users’ experience. Throughout, we’ve demonstrated flexibility and responsiveness to the European Commission and developers, listening and incorporating their feedback."
Related: Justice Department sues Apple, charges 'smartphone monopoly'
Google's alleged noncompliance
The Commission is additionally investigating Alphabet for potential noncompliance with steering rules, as well as the company's measures to prevent self-preferencing.
The investigation regarding potential self-preferencing is meant to determine whether Google search results show an unfair preference to Google's own services, such as Google Shopping, Flights and Hotels.
The company's competition director Oliver Bethell told TheStreet in a statement that it has "made significant changes to the way our services operate in Europe" to comply with the DMA. "We will continue to defend our approach in the coming months."
Meta's alleged noncompliance
The Commission has also opened an investigation into Meta's recently proposed "pay or consent" model for European users, which Meta launched last year as a means of getting into compliance with the then-pending DMA.
The model serves as Meta's "consent solution" to its processing of personal information for personalized advertising; users can now choose to pay to avoid that model.
The Commission said it is concerned that the "binary choice" provided by Meta "may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers."
The company, according to Reuters, offered last week to cut the cost of this monthly subscription fee to 5.99 euros from 9.99 euros.
“Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA," a Meta spokesperson told TheStreet. "We will continue to engage constructively with the Commission.”
The Commission is additionally gathering facts and information regarding to potential self-preferencing on the Amazon Store and Apple's new app fee structure.
The Commission said it plans to conclude the investigations opened Monday within a year.
Related: Epic Games CEO explains how it fought Apple and won
A regulatory landscape
This latest push from European regulators as anti-trust action from U.S. regulators against Big Tech has been mounting recently.
The U.S Department of Justice last week filed a sweeping anti-trust lawsuit against Apple, alleging that the company has built up a smartphone monopoly. The Justice Department sued Google last year, alleging that the company had built up a monopoly in digital advertising.
The Federal Trade Commission also has two ongoing cases, each alleging unfair monopolies, against Amazon and Meta.
Contact Ian with tips and AI stories via email, ian.krietzberg@thearenagroup.net, or Signal 732-804-1223.
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