Apple, Google parent company Meta and Google are all being investigated by EU authorities for possible breaches of new EU laws designed to monitor anti-competitive behavior by large technology companies.
The three face substantial fines if found guilty of violating the Digital Markets Act (DMA). is a landmark regulation that entered into force on the 7th of March, and aims to increase choice for online customers.
The European Commission (EU’s executive arm) said that it was investigating potential breaches in relation to: Apple’s and Google’s measures which allow app developers to “steer users” to offers outside of their app stores, whether Alphabet – Google’s owner – favours their own services, such as Google Shopping, in the search results on its engine, Meta’s decision for users to pay for an ad free experience on Facebook and Instagram, and whether or not it complies to
The commission stated that it suspects the gatekeepers’ measures do not comply with their obligations under DMA.
The law mandates that the six “gatekeepers” of the tech industry – Alphabet and Amazon, Apple and Meta, Microsoft, and TikTok’s owner ByteDance – follow guidelines to provide services like search engines, chat apps, and social networks used by other businesses. This is to create a level playing ground for their competitors and give users more options.
Thierry Breton said that if the companies were found in violation of the Act, they would be subject to “heavy penalties”.
He said that the Digital Markets Act was implemented on 7th March. We have been working with gatekeepers to adapt for several months and can see the changes already taking place on the market. We are not convinced by the solutions offered by Alphabet Apple Meta that they will respect their commitments to a fairer, more open and accessible digital space for European businesses and citizens.
Margrethe Vestager said that companies had ample time to comply with this act. She added that the Commission had worked closely with the companies to ensure compliance.
Vestager told journalists: “I do not believe this is rushed.” She stated that the purpose of the new laws is “not to create cases”, but rather to provide consumers with the choices they are entitled to under competition law.
She said that the DMA would be of benefit to consumers the sooner it was implemented. She said that the EU has put in place “strong incentives” to encourage companies to take responsibility for their actions.
The DMA can impose fines up to 20% on repeat offenders. Apple’s annual revenue was $383bn last year, Alphabet’s was $307bn, and Meta was $134bn.
Commission is also investigating Apple’s new fees for alternative app stores, and Amazon’s ranking policies on its marketplace. The EU executive hopes to conclude the investigations in a year as per the DMA.
Anne Witt, professor of antitrust at the EDHEC Business School in France, stated that the commission moved quickly to enforce this act. The commission hasn’t wasted time in opening these investigations. This is especially true when you consider that the DMA conduct rules were only applied to gatekeepers as of early March. She said that the DMA is facing a major test.
Max von Thun is the Europe Director of the Open Markets Institute which studies the impact of corporate monopolies. He said that the commission must be prepared to use the non-financial sanctions allowed by the act. For example, forcing the sale parts of a company.
He said that the commission should not hesitate in imposing significant fines on gatekeepers. It could also use other powerful sanctions, such as structural separation or acquisition bans, to get gatekeepers to cooperate.
Meta’s spokesperson stated that it believes charging for ad free versions of their platforms is in compliance with the Act. They said that they designed the’subscription to no ads’ in order to meet several overlapping regulatory requirements, including the DMA.
Google, who said that it has made significant changes to their services, stated it will defend its approach over the next few months. Apple stated that it was confident in its plan’s compliance with the DMA.