The EU has announced investigations into some of the biggest tech firms in the world over uncompetitive practices.
Meta, Apple, and Alphabet, which owns Google, are being looked into for potential breaches of the Digital Markets Act (DMA) introduced in 2022. If they are found to have broken the rules, the firms can face huge fines of up to 10% of their annual turnover.
EU antitrust boss Margrethe Vestager and industry head Thierry Breton announced the investigations on Monday. Just six companies have obligations under the DMA, but they are also the world's largest tech firms: Alphabet, Apple, Meta, Amazon, Microsoft and ByteDance.
None of the firms are actually based in Europe – five of them are in the US, while ByteDance has headquarters in Beijing. Three of them are now facing questions just two weeks after submitting their compliance reports, which will have been meticulously compiled.
It comes three weeks after the EU fined Apple €1.8bn (£1.5bn) for breaking competition laws over music streaming. Meanwhile, the United States accused Apple of monopolising the smartphone market in a landmark lawsuit against the tech giant introduced last week.
An Apple spokesperson says the company will constructively engage with the investigation and that they're confident that their plan complies with the Digital Markets Act. They added that their teams established a variety of mechanisms to comply with the EU's landmark legislation, as well as privacy and security protections for EU users.
“Throughout, we've demonstrated flexibility and responsiveness to the European Commission and developers, listening and incorporating their feedback,” they said. Meanwhile a Meta spokesperson said the firm's use of subscriptions as an alternative to advertising were “a well-established business model across many industries”.
“We designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA… we will continue to engage constructively with the Commission,” they said. Alphabet has been approached for comment.
Five investigations
The EU said it will investigate five different possible acts of non-compliance in its announcement:
- 1 & 2 – Whether Apple and Alphabet are not allowing apps to freely communicate with users and make contracts with them
- 3 – Whether Apple is not giving users enough choice
- 4 – Whether Meta is unfairly asking people to pay to avoid their data being used for adverts
- 5 – Whether Google preferences the firm's own goods and services in search results
The first two of these investigations concern what is known as “anti-steering” – and the EU says it believes the firms are making it difficult for apps to tell users about ways to pay less for their services outside of using app stores' own payment methods.
Under the third point, the EU says that Apple is obliged to allow users to easily uninstall apps on their devices, change default settings and be given “choice screens” to let them use different browsers or search engines.
The EU says Apple's web browser “choice screen” does not give people enough choice, and said that some apps, such as Apple Photos, cannot be deleted at all. According to Ms Vestager, the investigation will take around 12 months to complete – though Mr Breton later clarified it could take slightly longer.
“We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA,” she said.
“We will now investigate the companies' compliance with the DMA, to ensure open and contestable digital markets in Europe.” The five cases are consumer-focused, and highly relatable to most people who use products from these companies, which is collectively billions of people worldwide.
“We're talking about the protection of our citizens, we can't just sit around and wait,” said Thierry Breton, of the EU's decision to act straight away. There is however another reason potentially in mind: European Parliament elections are due to be held in June 2024.
Dr Rupprecht Podszun, director of the Institute for Competition Law at Heinrich Heine University in Dusseldorf, called it “a strong signal” from the EU.
“The DMA is designed for quick results,” he said.
“The cases that the Commission has selected go to the heart of the business models; these are not marginal issues for the gatekeepers.
“The legal battles will be tense, but we must always bear in mind that the Court of Justice will have the last word.”
— CutC by bbc.com
