Mar 25, 2024 - Technology

EU investigates Meta, Alphabet and Apple for violating competition rules

EU Commissioner Margrethe Vestager announces investigations into Apple, Alphabet and Meta

European Commission Executive Vice President Margrethe Vestager talks to media about non-compliance investigations against Alphabet, Apple and Meta under the Digital Markets Act (Thierry Monasse/Getty Images)

The European Union on Monday announced investigations into Apple, Meta and Google parent Alphabet for potential breaches of the bloc's new Digital Markets Act.

Why it matters: The new law has been in force for two weeks and the EU is signaling a rapid-fire approach to antitrust enforcement, a departure from a global tendency among regulators to mount backward-looking cases that drag on for years.

By the numbers: A total of five investigations have been opened into the three companies by the European Commission, the EU's executive arm, with decisions promised within 12 months.

  • The Commission is exploring whether app stores run by Google and Apple make it hard for app developers to "steer" consumers outside their app stores to let them pay for services, free of commissions. Many Apple competitors lodged complaints about Apple's compliance plan quickly after it rolled out.
  • Google's search engine is suspected of preferencing Google's services over competitors'.
  • Regulators also want to determine whether Meta's "pay or consent model" breaches EU data privacy laws. Facebook and Instagram users can pay around $11 a month to avoid ads and certain kinds of data collection.

Context: The DMA inverts the usual structure of antitrust investigations, particularly in the U.S., where the onus is on regulators to prove a company holds a monopoly and has illegally maintained it.

  • Under the DMA, the burden is instead on designated large "gatekeeper" companies to demonstrate how their products are preserving open markets and competition.

Another innovation in the DMA is that companies found to be in violation of the rules are given time to provide fixes to their products to avoid a fine.

  • For example, Meta has been given 6 months to make Messenger interoperable with other messaging services.

By the numbers: The Commission can issue initial fines up to 10% of a company's annual global revenue, rising to 20% of revenue when there is "repeated infringement.

What they're saying: "We are not convinced that the solutions by Alphabet, Apple and Meta respect their obligations for a fairer and more open digital space for European citizens and businesses," EU Commissioner Thierry Breton said.

The other side: "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," Apple said in a statement. "Teams across Apple have created a wide range of new developer capabilities, features, and tools to comply with the regulation."

  • Subscription alternatives to free services supported by advertising "are a well-established business model across many industries," Meta spokesperson Matt Pollard said.
  • "Launching the first preliminary investigations under DMA just days after the compliance deadline throws a wrench into the idea of companies and the European Commission working together to implement the DMA successfully," Daniel Friedlaender, head of global tech lobby CCIA in Europe, said in a statement.
  • He said: "The timing of these announcements, while the DMA compliance workshops are still ongoing, makes it look like the Commission could be jumping the gun. Possible outcomes aside, this move risks confirming industry fears that the DMA compliance process might end up being politicized."
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