The European Commission began an extensive investigation targeted at Apple, Amazon, Alphabet, and Meta over non-compliance practices under the new Digital Markets Act (DMA) on March 25.
The commission inquiry represents the EU’s first major attempt to curb anti-competitive practices by big tech companies labeled as “gatekeepers” by the commission.
EU Targets Apple, Google, Meta Practices
According to the announcement, the European Commission has opened five separate investigations to scrutinize the business practices of Apple, Google, and Meta, which may violate the DMA rules on fair competition.
Today, we’ve opened five non-compliance investigations under the Digital Markets Act.
It concerns:
🔹Alphabet’s rules on steering in Google Play
🔹Alphabet’s self-preferencing on Google Search
🔹Apple’s rules on steering in the App Store
🔹Apple’s choice screen for Safari… pic.twitter.com/kiZ7sLQa8B— European Commission (@EU_Commission) March 25, 2024
The investigation will examine Alphabet (Google’s parent company) and Apple’s restrictive “anti-steering” policies. Under these rules, tech firms are forbidden from blocking businesses from providing cheaper purchase alternatives outside their app stores.
“Today, the Commission has opened non-compliance investigations under the Digital Markets Act (DMA) into Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari and Meta’s ‘pay or consent model,” the commission explained.
Meanwhile, an investigation has commenced into Apple’s user preference. This probe would confirm if Apple has fully allowed its users to uninstall its default apps and change default settings for services like web browsers on iOS devices.
Alphabet is also facing another non-compliance scrutiny over the claim that it abused dominance in its search engine recommendations for users.
The inquiry is to ensure Google does not only recommend its specialized Google Shopping data to users over other comparable search results from competitors.
The final investigation would see the EU probe Meta’s “pay or consent” model for Facebook and Instagram. The policy requires users to either purchase a subscription for an ad-free experience or consent to data tracking on the free version.
Rigorous Enforcement of the Digital Markets Act (DMA)
The DMA was launched in November 2022 and fully took effect on March 7, 2024. It was created to allow fair competition in digital markets, which big tech companies have long dominated.
EU Commissioner for Competition Margrethe Vestager has disclosed that, despite the market law launch in 2022, tech firms “seem to be at odds with the DMA’s intent.”
She, however, warned that any company found culpable for violating the tech law would incur a potential fine of up to 10% of the company’s global revenue and 20% for repeated offenses.
Meanwhile, Apple seems to be the first company to be fined for its anti-steering provisions by the EU.
The EU fined the iPhone maker $1.95 billion earlier this month for restricting app developers from suggesting cheaper music subscription services to iOS users.
The company was also accused of offering “higher fees” and a less secure and unresponsive user experience. This even came earlier before the US Department of Justice (DOJ) filed a lawsuit against Apple on unfair rules targeting crypto apps.
On the other hand, Alphabet has insisted on operating in conformity with the digital regulations. This follows Alphabet Director of Competition Oliver Bethell’s statement that the tech company has made “significant changes” to its operations in Europe.
The EU investigation is expected to be completed within 12 months, which would give an insight into whether the tech giants have opened up the digital market for fair competition or made changes that best suit their operations.