The European Union has begun investigations into Apple, Google, and Facebook parent Meta, alleging they fail to comply with a new historic European rule to encourage competition in digital services.
The European Commission stated that it “suspects” that all three corporations’ actions “fall short of effective compliance” with the Digital Markets Act (DMA), which took effect earlier this month. If the investigations reveal a “lack of full compliance,” they may face “heavy fines,” according to European Commissioner Thierry Breton.
Apple, Google And Meta At Risk Of ‘Heavy’ Fines As Europe Launches New Probes
The DMA mandates dominant online platforms to provide users with more options and competitors with more opportunities to compete. It currently applies to the three internet titans under investigation, as well as Amazon (AMZN), Microsoft (MSFT), and TikTok’s Chinese parent company, ByteDance.
The EU has stated that the list might include Elon Musk’s X and Booking.com by mid-May.
Violations of the new rule may result in severe penalties, including fines of up to 10% of a company’s global revenue and up to 20% for further violations. This would amount to tens of billions of dollars for most regulated enterprises.
The European Commission is looking into Meta’s “pay or consent” policy, among other activities. Last October, Meta (META) announced a subscription service named “Subscription for no ads,” which allows European users of Facebook and Instagram to pay up to €12.99 ($14) per month for ad-free versions.
“The Commission is concerned that the binary choice imposed by Meta’s ‘pay or consent’ model 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 (large companies),” the agency said in a statement.
A Meta representative responded: “Subscriptions as an alternative to advertising are a well-established business model across many industries, and we created ‘Subscription for no advertisements’ to fulfill multiple overlapping legal duties, including the DMA. We will continue to work constructively with the Commission.
The EU is also looking into app marketplaces run by Apple (AAPL) and Google. According to the DMA, significant digital platforms, often called gatekeepers, must allow app developers to “steer” consumers to deals outside the two leading shops for free.
Apple, Google And Meta At Risk Of ‘Heavy’ Fines As Europe Launches New Probes
Among other issues, the EU fears that Apple and Google’s parent Alphabet (GOOGL) limit developers’ capacity “to freely communicate (with end-users), promote offers, and directly conclude contracts, including by imposing various charges,” the Commission stated.
“We are concerned that Alphabet, Apple, and Meta are not meeting their obligations; for example, Apple and Alphabet continue to charge recurring fees to app developers,” European Commissioner Margrethe Vestager wrote on X Monday.
The European Commission has also raised concerns about Apple’s “choice screen” for Safari. According to the DMA, Apple must alert consumers with “choice screens that must effectively and easily allow them to select an alternative default service, such as a browser or search engine on their iPhones.”
In a statement to CNN, Apple said: “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.”
Another of the Commission’s worries is about Google Search. Alphabet may not have done enough to guarantee that third-party services appearing in search results are treated in “a fair and non-discriminatory manner” compared to Alphabet’s services, such as Google Shopping and Google Flights.
Apple, Google And Meta At Risk Of ‘Heavy’ Fines As Europe Launches New Probes
Google’s competition chief, Oliver Bethell, said in a statement: “To comply with the Digital Markets Act, we have made major modifications to how our services function in Europe.
“Over the last year, we have held dozens of events with the European Commission, stakeholders, and third parties to solicit and respond to input, as well as to balance competing needs within the ecosystem. We will continue to defend our stance in the coming months.”
SOURCE – (CNN)
