Apple, Google, Meta face EU probe for potential violations of sweeping Digital Markets Act

SCIENCE & TECH: Apple, Google, Meta face EU probe for potential violations of sweeping Digital Markets Act

Apple, Google and Meta face noncompliance investigations in connection to a sweeping new European law aimed at cracking down on anticompetitive business practices, EU regulators revealed Monday.

The European Commission, the European Union’s antitrust body, said the probes would focus on “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.’”

“We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA,” EU antitrust chief Margrethe Vestager said in a statement. “We will now investigate the companies’ compliance with the DMA, to ensure open and contestable digital markets in Europe.”

EU antitrust boss Margrethe Vestager is pictured. AP

The investigations are the first major test of Europe’s Digital Markets Act. The law targets six Big Tech titans who were determined to be “gatekeepers” of the Internet – Alphabet, Amazon, Apple, TikTok parent ByteDance, Meta and Microsoft. The companies had until March 7 to comply with its rules.

If the Big Tech firms are found to have violated the Digital Markets Act, EU regulators can impose fines of up to 10% of their global revenue for their first offense and 20% for repeated violations. They also can order changes to business models “in the case of systemic infringements.”

The European Commission said it is also gathering information as to whether Amazon is self-preferencing its own products in its online store, as well as whether Apple’s new compliance plan for the DMA, which includes charging app developers a new “core technology fee,” was “defeating the purpose” of the law.

The agency has not yet launched a formal investigation into those matters.

Officials have ordered Alphabet, Apple, Amazon and Meta to retain documents related to the inquiries.

The probe of Apple comes on the heels of last week’s antitrust lawsuit filed by the US Justice Department, alleging the company has taken illegal steps to ensure the dominance of its iPhone.

Apple shares fell more than 1% in early trading. Alphabet and Meta each dropped by less than 1%.

Apple faces mounting antitrust scrutiny in both Europe and the US. AP

The EU’s antitrust officials said they were investigating whether Google is self-preferences its own services, such as Google Shopping and Google Flights, in search results.

Google and Apple, which respectively operate the Play Store and the App Store, are being probed over whether they have fully complied with EU rules requiring them to allow third-party developers to “steer” customers to cheaper product offers outside their app stores.

“We will continue to defend our approach in the coming months,” Google’s director of competition Oliver Bethell said in a statement.

Apple is also being probed over the extent of its compliance with DMA rules requiring the company to make it easy for customers to uninstall its in-house apps or switch to other “default” settings for their preferred search engine.

Meta is under scrutiny over its ad-free subscription plans for EU customers. AP

Apple said it is in compliance with DMA and would “continue to constructively engage with the European Commission as they conduct their investigations.”

The European Commission already fined Apple nearly $2 billion earlier this month for “abusing a dominant position” in the music streaming industry. Apple vowed to appeal the fine.

In the case of Meta, antitrust watchdogs are examining the company’s implementation of widely-criticized ad-free subscription plans for Facebook and Instagram users in Europe. Meta has argued the plans are necessary in order to comply with European data privacy laws.

Google faces questions over whether it self-preferences in its search results. The Washington Post via Getty Images

“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 said in a statement.

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