Under a massive digital law, the EU launched its first-ever investigations on Monday against Apple, Google parent Alphabet, and Meta. The investigations could result in significant fines for the US giants.
The EU’s antitrust watchdog, the European Commission, made an announcement stating that it “suspects that the measures put in place by these gatekeepers fall short of effective compliance of their obligations under the DMA” (the Digital Markets Act of the bloc).
Six of the largest tech firms in the world, namely Alphabet, Amazon, Apple, Microsoft, ByteDance, the owner of TikTok, and Meta, have been deemed “gatekeepers” by the EU and have been required to abide by its historic DMA since March 7.
The DMA aims to curb the actions of the largest companies on the internet and ensure that they provide users with more choices in order to create a more equitable digital environment.
Although there have been changes, senior officials have suggested that they did not go far enough.
The EU’s internal market commissioner, Thierry Breton, stated, “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.”
The commission has the authority to fine companies up to 10% of their entire global turnover under the new regulations. Recidivism can increase this to as much as 20 percent.
In extreme circumstances, the EU has the power to break up companies.
Unlike the EU’s traditional rules that saw probes last for years, the DMA demands regulators act fast and complete any investigation within 12 months of its start.
– Restriction fears –
Monday’s probes are focused on whether Alphabet’s Google Play and Apple’s App Store are allowing app developers to show consumers offers, free of charge, outside of those app marketplaces.
“The commission is concerned that Alphabet’s and Apple’s measures may not be fully compliant as they impose various restrictions and limitations,” it said in a statement.
Alphabet is also under suspicion over whether Google search results favour its own services — Google Shopping, Google Flights and Google Hotels — over rivals.
The EU slapped a whopping 2.4-billion-euro ($2.6 billion) fine on Google in 2017 over similar claims of self-preferencing.
Apple is also under the spotlight over whether it allows users to easily uninstall apps on its iOS operating system and the design of the web browser choice screen.
Under the DMA, the gatekeepers must offer choice screens for web browsers and search engines in a bid to level the playing field and give users more options.
Meta faces more problems over its ad-free subscriptions model, which has already been targeted by three complaints since it launched in November.
The commission fears the “binary choice” for EU users “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 gatekeepers”.
Meta has faced an avalanche of legal problems in the EU over its data processing, including a 1.2 billion-euro fine last year for data privacy breaches.
– Turning sour on Apple –
In a separate move, regulators will also explore whether Amazon may be favouring its own brand products on the Amazon Store and whether Apple’s new fee structure for alternative app stores “may be defeating the purpose” of its DMA obligations.
EU regulators also ordered Alphabet, Amazon, Apple, Meta and Microsoft to “retain certain documents to monitor the effective implementation and compliance”.
Monday’s announcement is one more problem for Apple, which faces a glut of legal challenges on both sides of the Atlantic.
Last week, the US Department of Justice sued Apple, accusing the company of operating a monopoly in the smartphone market.
That was just weeks after the EU slapped a 1.8-billion-euro fine on the iPhone maker for preventing consumers from accessing cheaper music streaming subscriptions.
Apple said it would appeal the EU fine.
AFP
