EU opens probe against Alphabet, Apple, Meta 

Tech giants Meta, Apple, and Alphabet, which owns Google, are being investigated by the European Commission for potential non-compliance of the Digital Markets Act (DMA) introduced in 2022.

The commission will probe 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 suspects that the measures put in place by these companies fall short of effective compliance of their obligations under the new antitrust law. 

If found in violation of the law, they can face fines of up to 10% of their annual turnover. Such fines can go up to 20% in case of repeated violations.

EU’s competition policy head Margrethe Vestager said the three companies are being investigated to ensure open and contestable digital markets in Europe.

The DMA aims to regulate gatekeepers, which are large digital platforms that provide an important gateway between business users and consumers, whose position can grant them the power to create a bottleneck in the digital economy. 

Six companies—Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft—have been designated as gatekeepers by the Commission in September. As per the rules, they had to fully comply with all DMA obligations by 7 March.

The probe was launched after the end of the deadline and assessment of the compliance reports setting out gatekeepers’ compliance measures.

“We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA. We will now investigate the companies’ compliance with the DMA, to ensure open and contestable digital markets in Europe,” Vestager said. 

“The Digital Markets Act became applicable on 7 March. We have been in discussions with gatekeepers for months to help them adapt, and we can already see changes happening on the market. But 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’s commissioner for internal market, Thierry Breton, said. 

“Should our investigation conclude that there is lack of full compliance with the DMA, gatekeepers could face heavy fines,” Breton said.

There are a total of five non-compliance investigations against the three companies. 

One of the investigations will assess whether Alphabet and Apple app stores violate the DMA, which requires gatekeepers to allow app developers to “steer” consumers to offers outside the gatekeepers’ app stores, free of charge.

Earlier this month, Apple was fined over €1.8 billion (about $2 billion) by the European Commission for violating the EU’s antitrust rules over music streaming. It put restrictions on app developers, preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app, the order said. 

Another probe will determine whether Alphabet’s display of Google search results may lead to self-preferencing in relation to Google’s vertical search services (e.g., Google Shopping; Google Flights; Google Hotels) over similar rival services.

The commission will also investigate Apple’s compliance with user choice obligations to enable users to easily uninstall any software applications on iOS, easily change default settings on iOS, and prompt users with choice screens which must effectively and easily allow them to select an alternative default service, such as a browser or search engine on their iPhones.

Meta’s controversial “pay or consent” model is also being probed by the commission. Meta last year launched an ad-free subscription for Facebook and Instagram that allowed users to opt out of seeing any adverts. However, non-subscribers wouldd have to agree to being tracked for microtargeting ad business if they want to keep using the social media. 

The commission said it was 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 gatekeepers.

The probes will also gather facts to clarify whether Amazon may be preferencing its own brand products on the Amazon Store in contravention of the DMA Apple’s new fee structure and other terms and conditions for alternative app stores and distribution of apps from the web may be defeating the purpose of its DMA obligations.

The probes are expected to be completed within 12 months.